Some Re-fi questions
 

I know several of you here are involved in the Real Estate business. We are refinancing for home-improvement purposes. We are refinancing with the same company that holds our Mortgage.

A couple of questions.

Title Insurance. This is about $2500. Do we need another Title policy? It seems that we need to re-do the lenders policy, but not our own Title Policy, is that correct?

My original settlement shows 2091, for mine, and $100 for the lender policy. Sounds like someone is trying to sell me another tlte insurance policy for myself.

Yes!!!

You NEED title insurance. You insure your car, right? How much more is at stake if there is a clouded title?

I had to use title insurance once on a commercial piece I own. It paid for itself many times over.

Why would you need title insurance when you are refinancing your own property?!?

All you are essentially doing is taking a loan out secured by your property. Can't see what use a title insurance policy would be to the owner in that case. (Of course, the lender will want it, to protect themselves, i.e., to make sure there is enough equity in the property to secure the loan they are making).

I know I need Title insurance, but, according to my policy, it is good for as long as I own the home. It looks like a need a new half for the lender, but not a new policy for me. Mine should continue in force as long as I own the house.

I must be missing something here.

1) Why do YOU (not the lender, but you) need title insurance for a re-fi? What is it protecting YOU (not the lender, but you) against?

2) How can title insurance be "good" for as long as you own your house? Title insurance only insures the status of title as of the date of the issuance of the policy. They can't/won't insure against encumbrances or clouds after that date. So if you have some reason for needing title insurance that is up to date in connection with your refi (i.e., you have an answer for question 1), then you'd need a new policy.

Refis require a new lender's title insurance policy, not an owner's policy. One way to avoid it would be to get a new 2nd loan where the lender pays the closing costs. That depends on the current rate and terms you have on your existing 1st mortgage if that's worthwhile.

I don't mind paying for the lenders Policy. I do not want to pay for both, which is what it looks like.

Re: Some Re-fi questions
 

Title Co is trying to get paid. There are different tiers for title policies depending on refi or purchase. Obviously Purchase is much more. On a refi it's common to see them charge Purchase rates on Refis - you call them on it.

There's nothing stopping the Title Co from blowing your head off on escrow and title, I'd go back to the existing title co. and check for a discount since they've already got it.

Or switch..

rjp

I have found that the title company will always try to issue new lender's and owner's policies on refi's unless someone stops them. Don't assume they are giving you their best deal.

That is what it looks like. I swear, you have to know everything about everything, or you get screwed in this world.

Sometimes I don't mind paying a little extra when I don't want to deal with knowing all the details. But title insur. can get expensive. The consolation is that the price is usually set by the state as a fixed amount per $100 of loan amount. I always thought there wasn't even much point in an owner's policy on a purchase if the LTV was high, since the bank was always gonna go to bat in case of title trouble.

I read the Texas Title regs and I am being offered the "Basic Rate" which is both sides. I have called my present Title Company to see what they can do for me.

I talked to my title insurance company. We are in a fully regulated state for Title Insurance. I am screwed! I get to save like $200

Update
 

New Title Insurance cost - Lender only:

$1200

My GOD...what is your house worth? How much of a loan are you taking out? Title insurance here only runs $3/1000 for lender's coverage. And if you use the same title insurance company, there's usually a re-issue rate of $1.80/1000. This is because they only have to update for the period between your first loan and the current loan.:confused:

It's Texas. It's expensive to live here...

From a bank's standpoint it's expensive since the lender has no recourse in Tx. Very pro-consumer state.

Bank makes mistake, borrower doesn't have to pay back..

http://www.tdi.state.tx.us/orders/titlerates2004.html

Premiums shall be calculated as follows for policies in excess of $100,000:

1. For policies of $100,001 - $1,000,000

Basic Premium

(1) Subtract $100,000 from policy amount.

(2) Multiply result in 1.(1) by $.00534 and

round to nearest whole dollar.

(3) Add $843 to result in 1.(2).

No chit.

As an attorney who has closed 100's of loans in my prior practice let me go on the record to say title insurance is one of the biggest ripoffs in real estate.

Title Insurance appears to be one of the most lucrative forms of Insurance on the premiums vs. payouts ratio. Of course, it is a lifetime policy.