Refinancing a mortgage can be a savvy financial move—whether to secure a lower interest rate, shorten your loan term, or tap into home equity. But as many homeowners discover, refinancing comes with its closing costs. Among them, title insurance can be one of the more confusing—and potentially expensive—line items. The good news? You can save money on title insurance during refinancing if you know what to look for and how to ask for it.
This article explores title insurance, why it’s needed when refinancing, and, most importantly, how to reduce its cost or avoid unnecessary charges altogether.
What Is Title Insurance?
Title insurance protects mortgage lenders—and sometimes homeowners—against financial loss due to property title defects. These might include unresolved liens, boundary disputes, or ownership claims not uncovered in the original title search. When purchasing a home, both a lender’s title insurance and an optional owner’s policy are typically issued.
Only a lender’s title policy is required during a refinance. This is because the new lender wants the same assurances as the original lender: that the title is clear and that their financial interest is protected.
Why You Have to Pay Title Insurance Again During Refinancing
If the property hasn’t changed hands, why must a new policy be issued?
Each time a mortgage is refinanced, a new loan is created. The new lender wants assurance that their claim on the property is valid and uncontested—hence, a new title search and insurance policy. However, many of the same documents and information used during your original home purchase can still apply, which opens the door to cost-saving opportunities.
How Much Does Title Insurance Cost During Refinancing?
The cost of a lender’s title insurance policy during a refinance varies depending on your state, loan amount, and the title company you choose. On average, it can range between $500 and $1,500, but in some states, fixed rates apply based on loan size.
However, since this is a reissue of a policy, homeowners who meet certain criteria are often eligible for discounts—sometimes substantial ones.
Innovative Ways to Save Money on Title Insurance During Refinancing
1. Ask for a Reissue Rate (Discounted Title Insurance)
Many title insurers offer a reissue rate, which is a discount applied to a new title insurance policy if an existing policy is already in place for the property. This discount can range from 25% to 60%, depending on the company and how recently the last policy was issued.
To qualify, you typically need to:
- Provide a copy of your original title insurance policy or settlement statement (HUD-1 or Closing Disclosure).
- Refinance within a specific timeframe—commonly within 10 years of the original policy date.
Tip: If unsure whether you’re eligible, ask your lender or title agent to check for reissue rate eligibility. Please don’t assume it will be offered automatically.
2. Shop Around for Title Insurance Providers
While your lender may suggest a preferred title company, you’re not obligated to use them. Comparison shopping can uncover more competitive rates or more generous providers with discounts and reissue rates.
Use websites like:
- ClosingCorp.com
- Bankrate
- Local title companies’ websites
Ask each provider for a Loan Estimate with itemized title fees. Explain that you’re refinancing and may qualify for a reissue rate.
3. Negotiate with the Title Company
Title fees aren’t always set in stone. Some companies are willing to match or beat competitor prices, especially if you’re an existing client or your refinance is handled by a real estate agent, broker, or attorney with established relationships.
Also, inquire about bundled services. Some companies reduce costs if you use them for both the title search and closing services.
4. Consider Using the Same Title Company You Used Before
If your refinance is happening with the same lender or title company from your original purchase, they may have easy access to prior title documents. This can streamline the reissue process and improve your chances of qualifying for a discount.
Even if you’re using a different lender, it’s still worth contacting your original title company to see if they’ll issue a reissue-rate policy or cooperate with your new provider to save you time and money.
5. Check Your State’s Title Insurance Regulations
Title insurance rates are regulated in many states. In states like Texas, Florida, and New York, title insurance prices may be set by law or filed with a regulatory body, leaving little room for price differences.
However, even in regulated states, discounts for refinancing are still often available. For example:
- Florida: Offers refinance credits if the new mortgage is made within three years of the original.
- Pennsylvania: Allows for reissue rates when the homeowner can present a prior title policy.
- California: Offers significant discounts for refinance transactions within the past 5 years.
You can search your state’s Department of Insurance website or speak with a local title agent familiar with your area’s rules.
6. Request an Itemized Loan Estimate from Your Lender
The Loan Estimate (formerly the Good Faith Estimate) outlines all projected loan and closing costs, including title insurance. If you see unusually high charges, question them. Some fees may be padded or contain unnecessary add-ons.
Ask specifically:
- Am I getting the reissue rate?
- Can this title insurance fee be reduced?
- Can I choose a different title company?
If dissatisfied with the response, consider switching title providers or lenders.
Final Thoughts: Be an Informed Homeowner
Refinancing can reduce your long-term financial burden, but only if you approach it with a clear understanding of costs—especially title insurance. Many homeowners overpay simply because they don’t realize they have a choice or are unaware of reissue discounts and shopping options.
Key Takeaways:
- Always ask for a reissue or refinance rate.
- Shop around and compare multiple title insurers.
- Use your original title company if possible.
- Check your state’s regulations and available discounts.
- Scrutinize your Loan Estimate and negotiate fees.
By following these steps, you can ensure that your refinancing journey doesn’t come with unnecessary financial surprises—and that every dollar you save contributes to your financial future.
Learn more about our comprehensive title insurance services here.
Thank you for reading! If you enjoyed this article and want to explore more content on similar topics, check out our other blogs at Sonic Loans, Sonic Realty, and Sonic Title. We have a wealth of information designed to help you navigate the world of real estate and finance. Happy reading!
Saving Money on Title Insurance During Refinancing
When Do You Need New Title Insurance for a Refinance?
When Do You Need New Title Insurance for a Refinance
Title Insurance During Refinancing: What Changes?
How to Read a Preliminary Title Report
The Role of Title Insurance in Estate Planning
Understanding Title Insurance Endorsements
The Role of Title Insurance in Estate Planning
Understanding Title Insurance Endorsements
