You probably first hear about title insurance when you see it on your closing estimate and wonder what it actually does. If you are buying in Allentown or anywhere in Lehigh County, you want to protect your ownership and avoid surprises after settlement. In this guide, you’ll learn what title insurance is, how it works in Pennsylvania, typical costs and timelines, and how your agent coordinates a smooth closing. Let’s dive in.
Title insurance basics
Title insurance is a one-time policy that protects you from certain problems tied to the property’s past. It is different from homeowner’s insurance, which covers future events like fire or theft. Title insurance addresses defects that already exist but surface after you buy.
Two policies are common in a financed purchase:
- Owner’s policy protects your equity and ownership rights.
- Lender’s policy protects the lender’s interest in the mortgage.
If you pay cash, you can still buy an owner’s policy for protection. If you use a mortgage, your lender will require a lender’s policy.
Why it matters in Allentown
Lehigh County has a long history of property transfers, and older neighborhoods may involve complex chains of title. Even with careful records, issues can appear after you go under contract. Title insurance helps shift the financial risk of covered defects to the insurer, subject to policy terms and exceptions.
Common local title issues
- Municipal and tax matters, including unpaid city or county property taxes or local assessments.
- Historical transfers with older surveys or ambiguous lot descriptions.
- Utility or shared-use easements, like driveways or party walls.
- Contractor or mechanic’s liens tied to past remodeling.
- Judgment liens or probate questions connected to prior owners.
Records for Allentown properties are recorded at the Lehigh County Recorder of Deeds. Title examiners search those records to verify the chain of title.
Pennsylvania closing practices
In Pennsylvania, title insurance is regulated at the state level. Closings may be handled by a title company or an attorney, and both approaches are common. A title search and a title commitment are standard. The commitment lists exceptions and requirements that must be addressed before the company issues your policy.
What policies cover and exclude
Understanding what is covered helps you decide what you need and whether to request endorsements for extra protection.
Typical coverages
- Forged or invalid signatures in the recorded chain of title.
- Undisclosed heirs or defects in prior transfers and probate.
- Errors in public records, misfiled documents, or illegal deeds.
- Unknown liens or judgments that should have been found during the search.
- The insurer’s duty to defend your title in court for covered claims.
Common exclusions and exceptions
- Issues created after the policy date.
- Zoning or building-code violations unless specially endorsed.
- Unrecorded rights of parties in possession.
- Recorded easements, covenants, or restrictions listed as exceptions in the commitment.
- Boundary or survey disputes, which are often excluded from basic coverage.
Endorsements and expanded coverage
You can request endorsements to address specific risks. Examples include zoning, survey, environmental liens, and certain encroachments. Lenders may require some endorsements as a loan condition. Your choices should reflect the title commitment’s findings and your comfort with risk.
Costs and who pays in PA
You pay a one-time premium for each policy at closing. The owner’s policy is based on the purchase price. The lender’s policy is based on the loan amount and is usually the smaller premium. In addition to insurance premiums, your closing may include title search fees, settlement fees, recording fees, transfer taxes, and any curative or escrow charges.
Premiums and quotes
Rates and calculations can vary by insurer and may be subject to state-approved schedules. Because rates and local customs change, ask the title company for a written quote based on your contract price and loan amount. The quote should clearly separate the insurance premium from other title and recording fees.
Who pays the owner’s policy
Payment is negotiable in Pennsylvania. Some markets see sellers cover the owner’s policy. Others see buyers pay it. What matters is what your contract says. Confirm the agreement early so you can compare offers on a level field.
Timeline from contract to keys
Most transactions follow a predictable flow. The timeline may be shorter or longer based on title complexity and market volume.
Typical milestones
- After contract: Your agent or the title company orders the title search and commitment, usually within a few days.
- Title commitment: The company reviews public records and issues the commitment with exceptions and requirements. This can take a few days to several weeks for complex histories.
- Clearing issues: Payoffs, releases, or corrective documents may be needed. Simple files often close in 30 to 45 days. Complex matters can add time.
- Closing and recording: You sign the final documents, funds are disbursed, and the deed and mortgage are recorded at the county. Policies are issued at or shortly after closing.
Fixing common title problems
Even well-maintained records can reveal surprises. The key is to address them early.
Frequent issues in Allentown
- Unpaid property taxes or municipal liens.
- Clerical errors in deeds or legal descriptions.
- Gaps or missing documents in older chains of title.
- Easement or access questions on tight urban lots or multi-parcel properties.
- Judgment liens or bankruptcy filings that affect title.
Typical curative steps
- Pay off or subordinate liens before settlement.
- Obtain and record satisfactions or releases from lienholders.
- Record corrective deeds or affidavits to fix clerical errors.
- Use endorsements when a practical cure is not available.
- Escrow funds at closing in limited cases pending final resolution.
How your agent coordinates title
A skilled local agent helps you stay ahead of title details so closing is smooth and predictable. Here is the practical workflow you can expect in Allentown and greater Lehigh County.
Selection and order
- You choose a local title company or attorney. Many buyers ask for recommendations from their agent.
- After your offer is accepted, your agent shares the contract, contact details, lender info, and any known documents with the title company.
Commitment and review
- The title company issues a commitment that lists exceptions and requirements.
- Your agent reviews the commitment with you and your lender to flag anything that needs attention.
Curative coordination
- If payoffs, releases, or affidavits are required, your agent helps coordinate with the seller, lienholders, contractors, or attorneys to clear the items.
- Your agent keeps you and your lender updated so loan conditions and endorsement needs are met on time.
Closing logistics and follow-up
- Your agent coordinates the date, time, and location of settlement with all parties.
- You review the Closing Disclosure or HUD-1 together to confirm fees and credits.
- After closing, the title company records the deed and mortgage and issues your final policies. Your agent can help with questions about tax proration or delivery of your owner’s policy.
Buyer checklist: next steps
- Ask for your title company contact and request the title commitment as soon as it is ready.
- Confirm with your agent and lender which policies you need and who pays each one under your contract.
- Read the commitment’s exceptions and ask for plain-language explanations of anything you do not understand.
- Request written quotes for the owner’s policy and any endorsements you are considering.
- If you have boundary or improvement concerns, consider ordering a new survey and asking about survey-related endorsements.
- Keep copies of payoff letters and releases obtained during closing.
- Ask when to expect your recorded deed and your owner’s policy after settlement.
- If an issue arises, get the curative plan in writing before you close.
Final thoughts
Title insurance gives you confidence that past problems will not upend your new home. In Allentown and across Lehigh County, a clear title commitment, the right endorsements, and a proactive team can keep your closing on track. If you want a local advisor who coordinates the moving parts and explains each step in plain terms, connect with Creighton Faust for a smooth, hospitality-focused experience from contract to keys.
FAQs
Is title insurance required in Pennsylvania?
- A lender’s policy is required when you finance a home. An owner’s policy is optional but strongly recommended to protect your equity.
Who usually pays for the owner’s policy in Allentown?
- It is negotiable and set by the purchase agreement. Confirm who pays in your signed contract.
How much does title insurance cost in Lehigh County?
- It is a one-time premium based on the purchase and loan amounts. Rates vary by insurer. Ask the title company for an exact written quote.
How long does the title process take in Pennsylvania?
- A straightforward file can close in about 30 to 45 days. Complicated title histories or curative work can add time.
What happens if a title defect is found before closing?
- Many issues can be cured with payoffs, releases, or corrective deeds. Complex matters may require escrow or legal action and could delay closing.
How do I file a title insurance claim after closing?
- Notify your title insurer in writing and include documentation. The insurer will investigate and defend covered claims under your policy terms.
