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Archive for September, 2011

Do not overlook your largest expense when refinancing: your title insurance.

Title insurance protects you and the lender in case the title search missed a claim on the property. You purchased title insurance when you purchased your home, so why do you have to buy it again? The answer is that you need to purchase additional protection to cover the time from when you purchased until your refinance.

With that said, many people refinance only months after they purchase or refinance many times over a several year period.

The title insurance companies recognize this gets to be unfair so when you refinance if you use the same title insurance company as when you purchased they offer a 40% discount off the cost of the original policy.

For example, if you refinance a $200,000 loan,a full price title policy would cost about $724. But if you refinance and get your 40% discount, then you will only spend $434. That will save you $290 at closing.

Since most people finance their closing costs, you actually save close to $500.

To get this title discount, ask you loan officer up front to make sure the closing agent uses the same title insurance company and that you want the discount. If you wait until closing on you mortgage refinance it may be too late.