How Much Does Title Insurance Cost?

On average, the total of a title insurance policy is about 0.5% to 1% of your home’s purchase price. 

The median price for a home in the U.S. was about $269,500 in 2021. If your home is the median price, title insurance likely costs you somewhere between $1,347.50 and $2,695. Your home’s location significantly impacts your title insurance policy premiums. The median home price for California in 2022 is $505,000, while the median home price for Mississippi is $119,000. 

When you refinance your home, your new lender’s title policy typically costs closer to 0.5%.

Depending on the laws of your state, your title company either itemizes their fees or bundles them into a single title cost quote. If your state does the latter, you can ask your escrow agent for an itemized list of the title fees. 

Here’s a list of the general fees included in your title’s purchase price, and what they are.

Title Search Fee

Your title search determines whether your title is clean (a.k.a. free of any claims, liens, etc.) or if it can be disputed.

Endorsement Fee

When a loan is purchased, the previous owner must sign an endorsement note, formally denoting the title transfer.

Deed Preparation Fee

Simply put, this is the cost for preparing the deed.

Insured Closing Letter

This is the letter that forms a contract between the lender and the title insurance underwriter. In this letter, the underwriters agree to compensate the lender for any actual losses caused by specific types of misconduct on the part of the closing agent. 

Additional fees may include:

In some cases, your title company may quote you a different amount than what’s listed on your loan estimate. This differential may look fishy, but it’s not. Some state laws require title companies to disclose their fees in a different way. In the end, the cost of your title insurance should be what’s disclosed on your loan estimate. 

There are a few ways to save money on title insurance premiums. Here’s how to do it.

Negotiate With The Seller

Typically, title insurance is one of the closing costs that the buyer pays for. However, if it’s a buyer’s market, you may talk to the seller about paying your title insurance costs. If the seller is in a hurry to close, paying a little extra to transfer the title usually isn’t a big deal.

Endorsement Fee

When a loan is purchased, the previous owner must sign an endorsement note, formally denoting the title transfer.

Do Away With Add-On Fees

Typically, title insurers can’t make significant rate adjustments. Because of this, you’ll probably have a hard time finding stark contracts in title policy premiums. However, you can negotiate the add-on fees.

Title policies usually have extraneous fees associated with the transaction, such as mailing fees, copying fees, courier charges, and admin fees. Contact your title insurance company and ask if they can remove some of these fees.

Shop Around

Your lender may suggest a title insurance company. However, you are not obligated to abide by their recommendation. Sometimes they’re recommending a title company because they’ve worked with them before. 

As with many major decisions, I recommend looking into several title companies to see which one can offer you the best deal for the price. It doesn’t take long, and you could save hundreds, even thousands, of dollars!

In addition to shopping around for title insurance companies, remember that you can also shop around when selecting a lender.

Bundle Your Title Insurance Policies

When you buy title insurance, you're actually purchasing two different policies: a lender’s title insurance policy and an owner’s title insurance policy. 

Your lender’s title insurance policy protects your lender from any title disputes that occur after your property is purchased. Lenders almost always require to purchase the lender's title insurance, so they can avoid loss if problems with the title arise. 

Your owner’s title insurance policy protects your rights as long as you or one of your heirs remain the property owner. When you purchase the title, you’re buying the property and all debts—known or unknown—associated with it. Owner’s title insurance protects you from the unknown.

You can usually bundle both of these policies to receive a discount on your title insurance. This is often referred to as the “simultaneous rate issue”.

Ask About Additional Discounts

In certain situations, lenders may offer you a discount on your closing costs. Ask your lender about any options available to you. For example, if you refinance your home after five years, you should ask your lender about loyalty discounts on closing costs. Some homeowners insurance companies will give you a discount on coverage for each year you don’t file a claim.