How Do I Qualify for a Reissue Rate Discount?
A reissue rate is available to a homebuyer when:
1) The seller has owned the property for less than ten (10) years; and
2) The seller purchased an owner’s title insurance policy within that ten (10) year period
Does Federal Title seek out a reissue rate discount on behalf of the homebuyer?
Yes. If the seller has owned the property for less than ten (10) years, Federal Title will search its underwriter’s database for a prior policy and/or request evidence of a prior policy from the seller
Do I have to use the same Title Insurance Underwriter?
No. If the title company you selected underwrites through a different title insurance underwriter than the title insurance underwriter that issued the seller’s policy, you still qualify for a reissue rate.
What is the Amount of the Reissue Rate Discount?
In Maryland and the District of Columbia, the homebuyer receives a 40% discount based on the prior policy (seller’s policy) coverage amount.
For example, let's say a homebuyer needs a policy to cover a $500,000 purchase, while the seller's existing policy coverage amount is for $400,000. The 40% reissue rate discount would apply to the first $400,000, and the homebuyer would pay full price for the remaining $100,000.
On standard owner's coverage for a Maryland property, this would amount to a savings of approximately $504. Here is a breakdown of the dollar amounts using Original Title Insurance Premium rates on a $500,000 purchase in Maryland and Standard Owner's Coverage:
| Reissue rate discount | Total | NO reissue rate discount | Total |
| Policy coverage for first $400,000 | $1,397.50 | ||
| Reissue rate discount (40%) | ($559.00) | ||
| Policy coverage for first $400,000 w/ reissue rate discount | $838.50 | ||
| Policy coverage for remaining $100,000 | $370.00 | ||
| Policy coverage for$500,000 with reissue rate discount | $1,208.50 | Policy coverage for $500,000 without reissue rate discount | $1,712.50 |
Assuming the homebuyer qualifies, what is the average reissue rate discount?
Of course the answer to this question depends on the purchase price (new coverage amount) and the seller’s original purchase price (prior coverage). However, according to Federal Title’s internal analysis of nearly 20,000 transactions over a 15-year period, the average reissue rate savings by purchase price point is as follows:
| Purchase Price (New coverage amount) | Average Reissue Rate Savings (District of Columbia) | Average Reissue Rate Savings (Maryland) |
| $300,000 | $373.00 | $266.00 |
| $400,000 | $546.00 | $390.00 |
| $500,000 | $705.00 | $503.00 |
| $600,000 | $864.00 | $616.00 |
| $700,000 | $998.00 | $712.00 |
| $800,000 | $1,132.00 | $807.00 |
| $900,000 | $1,265.00 | $903.00 |
| $1 million | $1,400.00 | $998.00 |
How often is the reissue rate applied to real estate transactions in the DC Metro Area?
The reissue rate discount is applicable in approximately 65% of all transactions. The other 35% of the time, the homebuyer doesn’t qualify for the reissue rate at all (since seller has owned for longer than 10 years).
Federal Title's REAL Credit™ is applicable in 100% of real estate transactions.
How does Federal Title’s REAL Credit™ stack up against the average reissue rate savings?
Federal Title always provides homebuyers with the most savings. More often than not our REAL Credit™ gives higher savings compared to a reissue rate discount. In cases where the reissue rate savings exceeds the REAL Credit™, we apply the reissue rate savings.
Below is a comparison of the average reissue rate savings vs. our REAL Credit™ for purchases in the District of Columbia.
The comparison we provide between REAL Credit™ v. Reissue Rate is a comparison ONLY of those transactions in which the seller owned for less than 10 years. In other words, if we were to use an average reissue rate savings of ALL transactions, the dollar amounts would be much lower.
| Purchase Price (New coverage amount) | REAL Credit™ savings (District of Columbia) | Average reissue rate savings |
| $300,000 | $700.00 | $373.00 |
| $400,000 | $900.00 | $546.00 |
| $500,000 | $1,000.00 | $705.00 |
| $600,000 | $1,100.00 | $864.00 |
| $700,000 | $1,100.00 | $998.00 |
| $800,000 | $1,100.00 | $1,132.00 |
| $900,000 | $1,100.00 | $1,262.00 |
| $1 million | $1,100.00 | $1,400.00 |
Below is a comparison of the average reissue rate savings vs. our REAL Credit™ for purchases in the Maryland.
The comparison we provide between REAL Credit™ v. Reissue Rate is a comparison ONLY of those transactions in which the seller owned for less than 10 years. In other words, if we were to use an average reissue rate savings of ALL transactions, the dollar amounts would be much lower.
| Purchase Price (New coverage amount) | REAL Credit™ savings (Maryland) | Average reissue rate savings |
| $300,000 | $500.00 | $266.00 |
| $400,000 | $600.00 | $390.00 |
| $500,000 | $800.00 | $503.00 |
| $600,000 | $800.00 | $616.00 |
| $700,000 | $900.00 | $712.00 |
| $800,000 | $900.00 | $807.00 |
| $900,000 | $900.00 | $903.00 |
| $1 million | $900.00 | $998.00 |
"This serves as a reminder to homebuyers and their agents the importance of shopping for a title company," said Todd Ewing, president of Federal Title & Escrow Company.
The study, commissioned by Federal Title and conducted by Veris Consulting from February 1 through February 11 of this year, compared title charges among Washington Metro Area-based title companies, revealing stark differences in charges for identical real estate purchase transactions.
| STUDY CRITERIA · Only Washington Metro Area Title Companies that published a settlement fee and enhanced title insurance premiums for Owner’s and Lender’s Coverage. · Purchase Price: $500,000.00 · Loan Amount: $400,000.00 (1st Mortgage Only – not including costs for simultaneous 2nd Mortgages) · Type of Title Insurance: Enhanced Coverage (aka, Extended, Standard, Homeowners) Full Premium/Non-Reissue Rate · Owner’s & Lender’s (Simultaneous Issue) Policies · The “Total Title Charges” figure excludes Government Recording Costs & Recordation Taxes and Location Survey |
It included only those title companies that published their settlement fees/charges and title insurance premiums for both owner’s and lender’s coverage – also known as title charges – on their respective website.
Further, the study used identical criteria for real estate purchases in the District of Columbia, Maryland and Virginia. In the District of Columbia, the difference between the most expensive and the least expensive title services was $1,180; in Maryland, the difference was $935; and in Virginia, the difference was $934.
"About 70% of variable closing costs paid by the average D.C. Metro Area homebuyer are title-related," Ewing said. "Yet, very few homebuyers, or their agents, take the time to shop settlement companies to compare title charges."
Title expenses such as settlement fees, title insurance and lender origination charges may vary among service providers, and these kinds of expenses are known as variable closing costs, Ewing said.
He added that comparing title charges among D.C. Metro Area settlement companies can be a daunting task for the untrained eye, which may explain why so few consumers take the time to research title companies.
The study also examined each title company's Better Business Bureau rating to determine if there was any connection between higher title fees and ranking but found none.
Out of 25 companies, six had rankings and the only two that were accredited – Federal Title & Escrow Company and Express Title – were among the lowest and highest cost title service providers, respectively.
"The study suggests that higher fees do not equate to a higher BBB rating," Ewing said. "To the contrary, Federal Title is one of the lowest cost title service providers and also has one of the highest Better Business [Bureau] ratings, proof that a title company can offer top-notch customer service at competitive prices," he said.
While the study mostly focused on how shopping for title insurance services can amount to significant savings for homebuyers, fees charged to the home seller were also examined. Seller fees ranged from $393 to $736 and averaged around $500.
Below are the results of a study of rates published online by D.C. Metro Area title companies. Study criteria was the same across the board, and results are accurate as of February 11:
DISTRICT OF COLUMBIA
| Company Name / Website | Total Title Charges | Seller Fees | BBB Rating |
| Federal Title & Escrow Co. | $3,190.00 [PDF] | $495.00 [PDF] | (A) A+ |
| Counselor’s Title, LLC | $3,265.00 [PDF] | $443.00 [PDF] | NA |
| Settlement Pros | $3,580.00 [PDF] | $438.50 [PDF] | NR |
| Stewart Title | $3,925.00 [PDF] | not published | NR |
| Pinnacle Title | $4,084.99 [PDF] | not published | NA |
| National Settlement Services | $4,089.99 [PDF] | not published | NA |
| District Title | $4,090.00 [PDF] | not published | A+ |
| Paragon Title | $4,125.00 [PDF] | $454.50 [PDF] | B |
| Mid-Atlantic | $4,130.00 [PDF] | not published | NA |
| Capitol Title | $4,135.00 [PDF] | not published | A+ |
| KVS Law Group | $4,139.99 [PDF] | $520.00 [PDF] | NA |
| RGS Title | $4,185.00 [PDF] | $641.00 [PDF] | NA |
| Express Title | $4,339.99 [PDF] | not published | (A) A+ |
| Avenue Settlements | $4,370.00 [PDF] | $468.75 [PDF] | NA |
(A) = Accredited | NR = Not rated | NA = Not listed
MARYLAND
| Company Name / Website | Total Title Charges | Seller Fees | BBB Rating |
| Federal Title & Escrow Co. | $2,300.00 [PDF] | $495.00 [PDF] | (A) A+ |
| Counselor’s Title, LLC | $2,375.00 [PDF] | $443.00 [PDF] | NA |
| Settlement Pros | $2,755.00 [PDF] | $410.00 [PDF] | NR |
| Stewart Title | $2,787.50 [PDF] | not published | NR |
| Paragon Title | $2,870.00 [PDF] | $454.50 [PDF] | B |
| Olde Key Title | $2,943.00 [PDF] | $433.00 [PDF] | NA |
| Mid-Atlantic | $2,948.00 [PDF] | not published | NR |
| Capitol Title | $3,045.00 [PDF] | not published | A+ |
| Pinnacle Title | $3,045.00 [PDF] | not published | NR |
| RGS Title | $3,045.00 [PDF] | $530.00 [PDF] | NR |
| National Settlement Services | $3,050.00 [PDF] | not published | NR |
| KVS Law Group | $3,100.00 [PDF] | $520.00 [PDF] | NA |
| Village Settlements | $3,149.00 [PDF] | not published | NR |
| Express Title | $3,175.00 [PDF] | not published | (A) A+ |
| Avenue Settlements | $3,235.00 [PDF] | $538.75 [PDF] | NA |
(A) = Accredited | NR = Not rated | NA = Not listed
VIRGINIA
| Company Name / Website | Total Title Charges | Seller Fees | BBB Rating |
| Lighthouse Title | $2,321.00 [PDF] | $570.00 [PDF] | NR |
| Federal Title & Escrow Co. | $2,380.00 [PDF] | $495.00 [PDF] | (A) A+ |
| Counselor’s Title, LLC | $2,455.00 [PDF] | $443.00 [PDF] | NA |
| New World Title | $2,550.00 [PDF] | $535.00 [PDF] | NA |
| Dominion Title | $2,595.00 [PDF] | $470.00 [PDF] | NA |
| All American Title | $2,645.00 [PDF] | $393.00 [PDF] | NA |
| Settlement Pros | $2,960.00 [PDF] | $411.00 [PDF] | NR |
| National Settlement Services | $2,980.00 [PDF] | not published | NR |
| Highland Title | $3,012.50 [PDF] | not published | NA |
| Republic Title | $3,025.00 [PDF] | $460.00 [PDF] | NR |
| Key Title | $3,029.00 [PDF] | $624.00 [PDF] | NR |
| Mid-Atlantic | $3,060.00 [PDF] | not published | NR |
| Stewart Title | $3,087.50 [PDF] | not published | NR |
| Capitol Title | $3,125.00 [PDF] | not published | A+ |
| Pinnacle Title | $3,125.00 [PDF] | not published | NA |
| Global Title | $3,175.00 [PDF] | not published | B |
| RGS Title | $3,175.00 [PDF] | $736.00 [PDF] | NR |
| District Title | $3,180.00 [PDF] | not published | A+ |
| KVS Law Group | $3,180.00 [PDF] | $520.00 [PDF] | NA |
| Avenue Settlements | $3,235.00 [PDF] | $418.75 [PDF] | NA |
| Express Title | $3,255.00 [PDF] | not published | (A) A+ |
(A) = Accredited | NR = Not rated | NA = Not listed
###
Congress renewed the $5,000 DC homebuyer tax credit for another two years as part of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, the office of Congresswoman Eleanor Holmes Norton (D-DC) announced earlier this month.
The DC tax incentive will be retroactive for 2010 and continue through 2011.
"First-time homebuyers of a principal residence in the District, who meet income limitations and other eligibility guidelines may qualify for a one-time tax credit for up to $5,000 of the amount of the purchase price," Joe Gentile, vice president of Federal Title & Escrow Company, said.
To qualify as a first-time homebuyer in the District of Columbia, a homebuyer and his/her spouse must not have owned a home in DC during the one-year period before the date of purchase, said Gentile, adding that a homebuyer who owns property outside of DC may still be eligible for the $5,000 tax credit, as long as they qualify as a first-time homebuyer in the District.
DC's $5,000 homebuyer tax credit was first introduced in 1997 and has been renewed every year since.
"As the economy emerges from the Great Recession, [tax incentives] for our residents to buy houses could not come at a better time," Norton said in a statement. "House prices will not be as low as they are now for years to come. These tax incentives, which can only be used in the District, will also help stabilize the city's economy and to accelerate our economy's recovery."
Federal Title's website contains more information on the $5,000 DC homebuyer tax credit, including how to qualify and where to access the proper tax forms to claim the credit.
Active-duty service members and veterans may be eligible for a home loan guaranty program offered the Department of Veterans Affairs (VA), for purposes of purchasing or refinancing a home.
What is a VA guaranteed loan?
It is a loan that is made by a typical mortgage company, savings and loan, or bank, in which the VA guarantees a portion of the loan amount, thereby protecting the lender against loss if the mortgage payments are not made. The purpose of this program is to encourage lenders to provide veterans with more favorable terms on loans. For example, allowing the veteran to more easily negotiate interest rates, pay fewer closing costs, avoid having to pay mortgage insurance, and in most cases, not requiring a down payment when purchasing a home.
Who is eligible?
Veterans. You will need a Certificate of Eligibility in order to prove you are qualified to receive a VA loan. You can either apply online, your lender can obtain the Certificate online on your behalf, or you can apply by mail, by using VA Form 26-1880.
Active duty personnel. An original statement of service signed by the adjutant, personnel officer or commander of your unit or higher headquarters, identifying you and your social security number, as well as your date of entry on your current active duty period and accounting of any time lost during that period must be provided.
Reservists/National Guard Members. If you are still active duty in the Reserves or Guard, an original statement of service signed by the adjutant, personnel officer or commander of your unit or higher headquarters, showing the length of time you have been a member of the Reserves or Guard is required. Said statement must document at least six years of honorable service.
If you were discharged from the Reserves or Guard, you must submit copies of adequate documentation showing at least six years of honorable service. (Examples of adequate documentation include NGB Form 22 -- Report of Separation and Record of Service, or NGB Form 23 – Retirement Points Accounting, or their equivalents).
Some surviving spouses. You must apply for the Certificate of Eligibility by mail using VA Form 26-1817. In order to qualify, the veteran spouse must have died after service, and the VA determines if the death resulted from a service-connected disability.
What if you had a VA loan before?
If you still own the property, you may still have remaining entitlement to use towards another VA loan.
If you have sold the property or paid your previous VA loan in full, or if a qualified buyer has assumed your previous VA loan, your full entitlement would be restored, allowing you to use it again towards the purchase or refinance of another property.
How Do You Get a VA Loan?
The process to obtain a VA loan is similar to applying for any other loan. First, either you or your mortgage lender will need to obtain your Certificate of Eligibility. Next, if you are purchasing a home, you will need to sign a contract, and apply for a loan with the lender of your choosing. An appraisal will then be completed with a VA approved appraiser, to determine the value of the property. Once the appraisal has been completed, the loan process proceeds as normal and you settle on the property and move in.
Costs of Obtaining a VA Loan
A funding fee must be paid by all veterans using the program, unless you are exempt as a result of disability compensation. The funding fee amount ranges from 0.5% for interest rate reduction refinancing loans to 3.3% for subsequent users of the program. In addition, you can expect to pay normal closing costs for the VA appraisal, credit report fee, loan origination fee, discount points, title search and title insurance fees, recording fees, state or local transfer/recordation taxes (if applicable), and survey fees. You can obtain an online quote of title fees, recording fees, transfer/recordation taxes, and survey fees on our website.
Once a determination is made as to which benefits are most advantageous for the applicant, the closing process can finally begin. There are several noteworthy items to keep in mind at this time:
1. Prior to closing, the applicant will need to ensure that their mortgage is paid current, including interest, late charges, fees and penalties. In addition, any homeowner’s association or condominium association dues will also have to be paid current.
2. If you are a PCS eligible applicant receiving Government Acquisition Benefits:
A. You will need to have certified funds sent to your Benefits Specialist to pay for interest due on your mortgage to the time of settlement, as well as for any property taxes that may be due.
B. If your buyer has requested a home warranty, your benefits will not cover the cost of a home warranty. You will have to write a separate check to the home warranty company to cover the cost.
C. Any repairs that your buyer has requested be made to the property prior to closing will also not be covered as part of your benefits. You will either have to provide a check to the Government at the time of closing, or you will have to ensure that the repairs are made prior to closing.
D. As part of the Government Acquisition Benefits, the applicant will “sell” their property to the Government, who will in turn, on the same day, “sell” the property to the willing buyer. This results in two transactions, and if the applicant has a real estate agent, said agent’s commission will be paid as part of the second transaction (from the Government to the new purchaser).
3. Pursuant to the Unemployment Compensation Extension Act of 2009, which was signed into law in November of 2009, benefit payments under the Expanded HAP program are exempt from Federal taxes. However, there may be state tax implications, so applicants should seek financial and/or legal assistance.
4. For any applicants who had Federal taxes withheld prior to the law change in November of 2009 should receive a W-2C (Corrected Wage and Tax Statement) from the IRS.
While the housing market remains stagnate in many areas across the country, the Department of Defense is doing everything it can to assist its military families and civilian employees escape some, if not all, of the financial loss associated with selling home. While the process can be trying at times, once the settlement documents are signed and the mortgage is paid off, you will realize it was all worth it.
If you are thinking about applying, do not hesitate -- now is the time to take advantage of this program before the appropriated funds run out.
Federal Title & Escrow Company is the largest independently owned title company in the DC Metro area. We strive to provide value for our clients and offer the lowest price for settlement services.
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
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