What is the Iowa Title Guarantee Fee?
Iowa is the only state in the US that guarantees its titles. Iowa Title Guaranty (ITG) is a not-for-profit division of the Iowa Finance Authority that provides title protection for properties in Iowa. It eliminates the risks and prevents losses that may occur for a lender when a title is defective. It also protects the homeowner against errors and omissions.
ITG protects lenders up to the amount of the outstanding loan on the property. The lender receives a Lender’s Certificate to guarantee both that their title is legal and that their mortgage on the property is valid. The Title Guaranty also protects buyers up to the amount of the purchase price and provides assurance that the owner has the rights to the property. If the purchase price is $750,000 or less, the buyer may receive an Owner’s Certificate at no additional cost when issued concurrently with a paid Lender’s Certificate.
In LodeStar’s calculator, this fee will appear in “Section C. Services You Can Shop For” and is labeled “Title-IA Title Guarantee Fee,” as shown below:
Since this fee replaces the title insurance policy for each party, there will be no values for the lender’s or owner’s title policy when this fee is being quoted.
All endorsements and closing protection letters issued as part of a transaction are currently offered at no additional charge.
As the housing market fluctuates, so too will the pricing and purchase price thresholds Iowa Title Guaranty uses to calculate this fee. LodeStar monitors these changes so our clients don’t have to.