Ask The Expert
Ask The Expert
Can I Save Money by Choosing My Own Title Insurance?
Dear Liz,
I'm planning to refinance my mortgage and was shocked by the cost of title insurance. I'm sure it wasn't this expensive when I bought my home. Can I save money by shopping for title insurance, or do borrowers have to use the companies chosen by lenders?
Caitlin in San Francisco
Dear Caitlin,
Title insurance is required by lenders and can be, as you discovered, one of the most costly charges when refinancing a mortgage. There are a couple of things that could be making your title insurance more expensive. First, when you bought your home, the seller may have paid for part or all of your title insurance, depending on the custom in your area. When refinancing, you are responsible for all of the premium. Second, title company fees vary from company to company, and your lender may work with a more expensive company.
Shop for the Best Rates on Title Insurance
By law, the buyer (when purchasing a home) or the homeowner (when refinancing a mortgage) is allowed to select the title insurer. You should take advantage of that by comparing rates between insurers and selecting the best deal for you. In California, sites like CLTA Title Wizard allow you to compare rates for companies all over the state.
Check for Title Insurance Discounts
Call your your current title insurance company first. You may be eligible for a substantial discount if you don't switch companies, especially if you haven't had your current home loan very long. Then check with other companies. Some title insurers offer savings to various groups (such as first-time buyers, senior citizens, or people in certain professions), a "short-term rate" for a property that has been resold within the last five years, or a subdivision bulk rate for homes in a new subdivision. Title firms may cut you a break when both the lender's and owner's policies are purchased at the same time from them. Discounts generally range from 5% to 30%, but of course, compare the total costs--some firms' discounted prices are still more expensive than others' full-price offerings.
