Title policy--need clarification (insurance, mortgage, refinance)

[sssaustin]

I'm closing on my new home probably next week.

I'm with BAC no closing cost loan program and it says the title insurance is $300.

Meanwile my seller (builder,new contruction) says he would pay the cost of title policy(which about1%) if we go with his title insurance company...

So ...whats the difference between the two and which one should I go for...

I'd be more than happy if someone could explain me in detail.........

[TexasHorseLady]

The cost of the title policy is set by the State of Texas, not by the title company. All charge the same, by law. Here's the current rates (http://www.alamotitle-austin.com/library/20/TexasTitleInsuranceRates.pdf - broken link).

The $300 is likely for the title insurance that the lender requires the borrower to pay. That's considerably less.

[johnrex62]

The builder likely wants to pick the title company because he is familiar with the closers and has had good service from them in the past. It is well worth $300 to keep the closing at a place you know will do it right.

[titlehound]

The title premium in texas is promulgated meaning the actual policy premium should always be calculated the same, however there is an application of reissue rate for remaining amount of the prior mortgage and this is applied for a discount on a refinance. As for a purchase policy, the premium rates should be the same among providers. There MAY BE a difference in the settlement service costs - escrow, courier, signing fees, etc. which can be added to the cost to the title company services. BAC has joint ownership in a title agency which serves Texas as I understand and so they can offer the no cost option when competing with other banks. For the builder, they may own a title company such as DHI - DHI Title as an example is associated with DR Horton I believe. The cost of the policy may not differ but the additional services may well vary. Shop the settlement costs to verify. Best of luck.

[WoodyTX]

It shouldn't hurt to check with an outside lender, and make sure you're not getting the short end of the deal from the 'preferred lender'. Our outside lender beat the preferred one by a half-point plus lower closing costs.