When you find the home of your dreams, make an offer on it and apply for a mortgage, you might not give much thought to the cost of title insurance. But that can be a mistake.
A title policy defends buyers and their lenders from future property ownership claims, unexpected liens and other potentially costly complications with property titles. Homebuyers typically purchase title insurance as part of closing costs and often take the first title insurer suggested by the seller or Realtor.
Unfortunately, many buyers get sticker shock when they realize how much title insurance costs, as the fees are generally about 1 percent of the loan amount. But buyers can cut the cost of a title insurance policy by hundreds of dollars if they are willing to ask questions.
Here Are Four Ways To Save On Title Insurance:
- Shop around for the best deal. Title insurance involves a two-part process. First, a search of a property’s title history is performed to look for errors or problems with the deed. Then, an insurance policy is underwritten to protect the buyer if any issues are discovered.
In several states, insurance providers are allowed to set their own prices, which means the insurance premiums can vary greatly. Homebuyers won’t know which title insurance company in FL offers the best rates unless they shop around.
- Negotiate the add-on fees. In states where insurance is highly regulated, title insurers don’t have much room to negotiate their rates. So, homebuyers won’t find much difference in premiums from one company to another.
However, in nearly all cases, extra fees are part of the transaction when you purchase a title insurance policy. These add-on expenses might include mail and courier charges, copy fees, and costs for searches and certificates. These charges can be negotiable, even when the insurance premiums are not. You often can reduce these costs simply by calling your title company and asking to have some of the fees removed.
- Ask for the ‘simultaneous issue rate’. Homebuyers purchase title insurance to protect themselves. At the same time, their mortgage company will likely require that a separate insurance policy is issued in the lender’s name. It is typically the borrower’s responsibility to pay for both.
Although the two insurance policies are independent of one other, borrowers can buy them together and save. When the policies are issued at the same time, in some states there is something called the ‘simultaneous issue rate. It includes a highly discounted premium for the lender’s insurance. As a result, the total title cost for both policies is usually a lot less than if they were purchased independently. Always be sure to ask for this discount.
- Ask the seller to pay for your policy. When a local real estate market favors buyers over sellers, homebuyers may feel encouraged to ask sellers to pay for title insurance. That used to be a very unusual request.
However, in a buyer’s market, sellers are motivated and may be more willing to negotiate. You will see people financially negotiating on every term, including asking someone to pay for their title insurance. However, buyers should not lose sight of the overall goal, which is to close the sale.
There are many other concessions buyers can ask for in a deal, such as a reduced purchase price or a home warranty, that save even more money than having the seller pay for title insurance. Want the BEST PRICE for your home transaction closing, call today and we’ll be happy to answer all your questions and send you a FREE quote.
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