Do the title fees look reasonable?

[Nitin Dhiman]

Hi there,

I'm doing a cash-out refi of a single-family rental in Round Rock. If you're familiar with Title fees in Texas, could you comment on whether these seem reasonable? Sounds too high to me for $165K loan amount ...

• $1235 Lender's title insurance
• $550 Settlement or closing fee
• $421 Title endorsement
• $50 Tax certificate
• That totals to $2256 in title costs

Which of these fees could/should I reduce or eliminate through negotiating or shopping around?

Thanks!

[Alex G.]

1. Lender's title insurance is defined by the state premium rates based on the size of your loan. There are plenty of tables online for Texas title insurance premiums. Google that and compare if the amount matches the premium for how much you're borrowing. Now... some title companies will give you a certain amount of credit towards that premium IF you purchased or refinanced within a couple of years from today. It may take going through the same title co or insurance underwriter where you got your prior policy within last 2 years.

2. Title endorsement. Same logic for endorsements apply IF you recently paid for them on other refi or purchase. If you didn't, get a list of them with their individual premiums, and negotiate with your lender to either wave some of them or pick up some costs for them.

3. Settlement fee. A typical settlement fee on a purchase/sale per party (buyer and seller) could vary from $200 to $300. Obvioiusly, having a relationship with a title company where you close all your purchases and sales would go a long way to getting your settlement fee in that 200-250 range. Absent that, negotiate the fee with title co using the same logic -- there is only 1 party involved in refi, not 2, and the transaction is simpler than a purchase/sale. If they don't budge, call around and find another title office that will close for less money. There are plenty of them and they all want business.