It seems like prices never go down. Gas prices have gone up, taxes have gone up, the 5-cent bag tax has increased the cost of shopping, etc. And yet, sometimes, if you look closely enough, you can find prices that actually do drop. In this case, prices have dropped for refinancing borrowers by 40%.
First American Title Insurance Company, our title insurance underwriter, published their new title insurance rates effective April 1, 2011. The purchase title insurance rates remained unchanged, except for purchase prices in the highest brackets where the rate dropped considerably.
The big change is in the refinance category. First American has dropped their refinance loan policy rates by 40%! In essence, every refinance in Washington, DC will obtain a discount equal to what was previously the full reissue rate discount.
Previously a 40% discount on title insurance was available on a refinance, but the borrower had to jump through some hoops to be eligible. The full 40% discount was only available if the borrower had previously purchased a title insurance policy and if the policy was under 10 years old and if the prior policy was for an amount greater than the amount of the new loan.
Often clients either did not know where or how to find their title policy, and often clients who may have been eligible for the discount were not obtaining it. And frankly, often title companies kept the reissue discount a secret, not revealing it to a client unless the client asked for it.
Well, with this new change by First American, every refinance will obtain the equivalent of the old reissue rate discount, even if the refinance would not have been eligible under the prior guidelines. What does this mean for a borrower? It means that refinancing borrowers will save hundreds of dollars on their closing! For example, previously a refinance for $500,000 would have included a $2,100 for lender’s title insurance. As of April 1, 2011, a refinance for $500,000 will now include a charge of $1,260 for lender’s title insurance – a savings of $840.00!
We’ve updated the refinance rate chart is posted on our website. While you’re there, check out our homebuyer videos for a better understanding of title insurance and what title insurance does for you.