May 28, 2010

What Does Title Insurance Cost

When I refinanced my home last in 2003 I paid $484 for the title insurance fee.  The loan was for about $133,000.   At the time I just paid what they told me it cost and didn't even give it any thought.  I didn't even know what title insurance should cost.   Thankfully the rate I paid wasn't excessive.   If you're getting a mortgage then it would be a good idea to check the title insurance cost and then get quotes from multiple title insurance companies.

Normally a mortgage company will just pick a title insurance company and tell you what the fee is.  You might not even realize it but you are free to shop around and find your own title insurance.  The Wikipedia entry on Title Insurance says that "A federal law called the Real Estate Settlement Procedures Act (RESPA) entitles the individual homeowner to choose a title insurance company when purchasing or refinancing residential property."

But how much should Title Insurance cost? says that "In general, the cost of Title Insurance is around 0.5% of the purchase price of your home."   That gives rough ballpark.     The $484 that I paid was under 0.4% so that isn't bad given this 0.5% expectation.

I did a google search for title insurance providers in my town and found a few names.   Turns out a couple of them are owned by the same major company named Fidelity National Financial.    They have an online rate calculator that gives basic estimates of title insurance costs.    I also found another online estimator from First American Corporation.

Using those online calculators I did some searches on different home prices for each source.  The price of title insurance that I found for different home prices were as follows:

Home price - Title Cost
$100,000 = $450 to $743
$200,000 = $700 to $1,155
$300,000 = $950 to $1,568

It then goes up proportionally $250 to $412 for each additional $100,000.

In general you're looking at something in the range of 0.3% to 0.75% of the price of the house for the title insurance.

Keep in mind that these are just some example prices and the exact prices will probably depend on where you live.  I also looked at the cost of title insurance for foreclosures or refinances if they had the options and those kinds of title insurance fell within the ranges or regular purchase.

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