What is a reissue rate?
Simply put, it is a homebuyer discount on the cost of an owner’s title insurance policy.
The following sets forth the requirements along with the most common questions we encounter from homebuyers.
(Our title insurance underwriters are WFG National Title Insurance Company and First American Title Insurance Company, so for this discussion, we will focus on their reissue rate discount guidelines. The reissue rate guidelines of other national title insurance underwriters may vary.)
How do I qualify?
A reissue rate is available to a homebuyer when:
The seller purchased an owner’s title insurance policy and is able to provide a full copy of the policy.
Does Federal Title seek out a reissue rate discount on behalf of the homebuyer?
Yes. 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 the first $400,000||$1,815.00|
|Reissue rate discount (40%)||($726.00)|
|Policy coverage for first $400,000 w/ reissue rate discount||$1,089.00|
|Policy coverage for remaining $100,000||$410.00|
|Policy coverage for$500,000 with a reissue rate discount||$1,499.00||Policy coverage for $500,000 without reissue rate discount||$2,225.00|
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:
(New coverage amount)
|Average Reissue Rate Savings
(District of Columbia)
|Average Reissue Rate
How often is the reissue rate applied to real estate transactions in the DC metro area?
The reissue rate discount is applicable to approximately 65% of all transactions. The other 35% of the time, the homebuyer doesn’t qualify for the reissue rate at all. Federal Title’s REAL Credit™ is applicable in 100% of real estate transactions.