What are title service charges?


Title service charges are part of the closing costs you pay when you get a mortgage. When you buy a home, you receive a document commonly known as a deed (deed), which shows that the seller has legally transferred ownership or title to you. Title service charges are costs related to issuing a title insurance policy to the lender.

Title insurance can provide protection if someone later sues and claims that she has a claim on the home. The most common claims come from non-payment of taxes by a previous owner or contractors who say they were not paid for work done on the home before you acquired it.

Lender’s title insurance is generally required to obtain a home loan. Title service charges include the title search fee, the lender’s title insurance policy premium and other costs, and services related to the issuance of title insurance. In most states, the closing fee is also part of the title service fee.

Title service charges appear in section B or C, page 2, of your loan estimate (and section B or C, page 2, of your Closing Disclosure). If the title services are listed in section C, you can purchase them yourself.

If you decide to purchase homeowner’s title insurance, it will appear in section H of your loan estimate.

View an interactive sample loan estimate form.

Note: You will not receive a loan estimate or closing disclosure form if you applied for a mortgage before October 3, 2015, or if you are applying for a reverse mortgage.

For those loans, you will receive two forms: a Good Faith Estimate (GFE) and an Initial Truth-in-Lending disclosure, rather than a Loan Estimate. . In lieu of the Closing Disclosure, you will receive a final Truth in Lending disclosure and a HUD-1 Settlement Statement. The amount of the title service charges appears in block 4 of your Good Faith Estimate (GFE) and in line 1101 of your HUD-1 settlement statement. If you are applying for a home equity line of credit (HELOC), a manufactured home loan not secured by real property, or a loan through certain types of home buyer assistance programs, you will not receive an estimate. good faith or a loan estimate, but you should receive a truthfulness disclosure on the loan.

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