Title insurance is one of the closing cost items that catch homebuyers by surprise. The idea that you might need insurance to defend the title of your home in the future may seem unnecessary, but it does happen. What is the worst thing about title insurance? The cost.
Bankrate estimates that title insurance is roughly 1% of the total amount of the loan. If you purchase a home for $250,000 and secure a loan for $200,000, the title insurance amounts to $2,000. The good news is that there are ways to reduce this figure by several hundred dollars.
Negotiate with the seller
Some sellers favor a buyer so much or are so eager to get rid of a property that they may strike a few bargains. One involves paying for a portion of closing costs, including title insurance. While formerly considered an unusual request from buyers, more people are starting to ask for this while negotiating.
Like any other type of insurance plan, you can seek multiple quotes. Look beyond what the real estate agent recommends. Sometimes they receive commission or just want to help out a friend. You may find better deals elsewhere. In some states, premiums do not vary by much, but it is often possible to get add-on fees removed. These include copy fees, courier charges and certificate fees.
Get the simultaneous issue rate
Companies may not offer bundling in the traditional sense for this type of policy. However, you can often purchase two policies in one to get a reduced rate. The two policies include title insurance for yourself as well as insurance for the mortgage lender. Insurance companies do not often volunteer the discount, so asking is important.
Title insurance is often expensive, but there are ways to reduce it. It comes down to taking initiative and asking the right questions.