Title Policy Calculator Texas

Texas Title Policy Premium Calculator

Understanding Texas Title Insurance Premiums

When buying or refinancing property in Texas, title insurance is a crucial component of the closing process. Unlike many other types of insurance, title insurance protects against past events that could affect the property's ownership, such as undisclosed heirs, forged documents, or errors in public records. In Texas, the rates for title insurance are unique because they are "promulgated" by the Texas Department of Insurance (TDI). This means the state sets the rates, ensuring consistency across all title companies.

What is a Title Policy?

A title policy is an indemnity insurance policy that protects lenders and/or property owners from financial loss due to defects in a property's title. Before issuing a policy, a title company conducts a thorough search of public records to identify any potential issues. If a covered defect arises after closing, the title company is responsible for defending the title in court or compensating the insured for their loss.

Owner's Policy vs. Lender's Policy

• Owner's Policy: This policy protects the property owner (buyer) for as long as they or their heirs own the property. It covers the owner up to the sales price of the home and is typically paid for by the seller in Texas, though this can be negotiated.
• Lender's Policy: This policy protects the mortgage lender for the amount of the loan. It ensures that the lender's lien on the property is valid and enforceable. Lenders almost always require this policy, and the buyer typically pays for it.

How Texas Title Insurance Rates Are Calculated

The Texas Department of Insurance sets the premium rates based on the property's sales price for an owner's policy, or the loan amount for a lender's policy. These rates are tiered, meaning the cost per $1,000 of coverage decreases as the value of the property or loan increases. Our calculator uses these official TDI promulgated rates to provide an accurate estimate.

Key Factors Affecting Your Premium:

• Sales Price: The primary factor for the Owner's Policy premium.
• Loan Amount: The primary factor for the Lender's Policy premium.
• Transaction Type (Purchase vs. Refinance):
  • Purchase: Both an Owner's Policy (based on sales price) and a Lender's Policy (based on loan amount) are typically issued. The Lender's Policy often receives a significant discount when issued concurrently with an Owner's Policy.
  • Refinance: Usually, only a new Lender's Policy is required (based on the new loan amount), and it is charged at the full promulgated rate since there isn't a concurrent Owner's Policy being issued.

Example Scenarios:

Let's look at how the calculator works with realistic numbers:

1. Purchase of a $300,000 home with a $240,000 loan:
   • Owner's Policy Premium: Based on $300,000 sales price.
   • Lender's Policy Premium: Based on $240,000 loan amount, with the concurrent issue discount.
   • Using the calculator's default values, you'd see an estimated Owner's Policy Premium of $1,925.00 and a Lender's Policy Premium of $220.00, totaling $2,145.00.
2. Refinance of a $200,000 loan:
   • Owner's Policy Premium: $0 (typically not purchased during refinance).
   • Lender's Policy Premium: Based on $200,000 loan amount, at the full promulgated rate.
   • If you set Sales Price to $0, Loan Amount to $200,000, and select "Refinance", the calculator would show an estimated Lender's Policy Premium of $1,325.00.
3. Purchase of a $1,500,000 property with a $1,200,000 loan:
   • Owner's Policy Premium: Based on $1,500,000 sales price.
   • Lender's Policy Premium: Based on $1,200,000 loan amount, with the concurrent issue discount.
   • The calculator would estimate an Owner's Policy Premium of $5,575.00 and a Lender's Policy Premium of $1,100.00, totaling $6,675.00.

Important Disclaimer:

This calculator provides an estimate based on the standard TDI promulgated rates for owner's and lender's title policies. It does not include potential additional costs such as endorsements (e.g., T-19.1, T-47), escrow fees, recording fees, or other closing costs. The final title insurance premium and closing costs may vary. Always consult with a licensed Texas title company for a precise quote tailored to your specific transaction.