Refinancing? Ask for the Reissue Rate on Title Insurance

Mortgage Rates Hit Record Lows, Prompting Rush to Refinance

According to Freddie Mac, mortgage rates hit the lowest point on record since 1971 in September, averaging 2.86%. The drop in interest rates has prompted a rush to refinance for many homeowners in 2020, with little end in sight. 

Although refinancing can lower the amount of money you’ll owe over the life of your loan, it comes with some upfront closings costs––including title insurance. The good news is, depending on the state you live in, you may be eligible for a discounted rate. But, it’s important to make sure your title insurance provider is actually offering the lowest applicable premium.

house with money sun

Ask If You’re Getting the “Reissue or Refinance Rate”

The availability of discounted title insurance rates varies by state, but if you’ve purchased or refinanced a home in the recent past you could be eligible. This can result in a significant reduction in the amount you pay for title insurance—up to 40-60%. Here’s how it works in Texas:

For Example with Spruce

Table with Reissue Rate explanation in Texas
  • if you purchased or refinanced within the last 4 years in Texas. Other conditions may apply. 

In this example, the reissue rate discount would save you $1048.50 in closing costs! So, It’s a good idea to double check with your title company to see if they’re providing the lowest possible refinance rate in your area.

Why is the Reissue Rate Cheaper?

If you’ve lived in the house for ten years or less, it simply makes the title search process easier. There are fewer things that could have happened to the property: fewer instances of missing interests, transfers of ownership, etc. On a purchase transaction, the title search generally goes back a minimum of 30+ years on the chain of title—which requires a more thorough examination of the public records.

Less work for the title search provider equals less work for the title company, which means that the product should be cheaper for you!

Make Sure You Have a Copy of Your Original Policy

In many states, in order to qualify for the reissue rate, you’ll need to supply a copy of your original owner’s title insurance policy––from when you purchased the property. If you can’t find it, you can most likely get a copy from one of these people who helped with your original purchase transaction:

  • Title Agent
  • Real Estate Attorney
  • Title Underwriter

For more title industry insights, continue exploring the Spruce Blog or check out our FAQs.

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