How Much Does Title Insurance Cost in Texas?
If you are buying or selling a home in Texas, title insurance is one of the largest line items on your closing statement, and one of the least understood. The good news is that Texas handles it differently from most states, which makes the cost easier to predict once you know the rules.
Who Sets Title Insurance Rates in Texas?
Texas is a promulgated-rate state. The Texas Department of Insurance sets the basic premium rates that every title insurance company and title agent must charge. That means the premium for the same policy on the same property is the same no matter which title company you choose. The rate depends mainly on the purchase price or loan amount, so a higher-priced home carries a higher premium.
Owner's Policy vs. Lender's Policy
There are two separate policies. The lender's policy protects your mortgage company and is required on almost every financed purchase. The owner's policy protects you, and it is a one-time premium that covers you for as long as you own the property. Lenders do not require the owner's policy, but without it you carry the risk of problems such as forgery, undisclosed heirs, recording errors or unpaid liens that were missed in the title search. When both policies are issued at the same closing, the lender's policy is typically priced at a small flat amount, which is why many buyers find the combined cost lower than expected.
Who Usually Pays for Title Insurance?
Under the standard TREC residential contract, the seller pays for the owner's policy and the buyer pays for the lender's policy. These are defaults, and they can be changed by agreement in the contract. In a competitive market, buyers sometimes ask the seller to cover more, and sellers sometimes negotiate to split costs. Always check your contract before assuming who pays.
What Else Is on the Bill? The Fees That Are Not Regulated
The premium is fixed, but other charges are not. Escrow or closing fees, courier and wire fees, document preparation and recording fees can vary from one title company to another. If you want to compare companies, compare these fees along with service, speed and communication, not the insurance premium. Optional endorsements, such as coverage that removes certain survey or restriction exceptions, also have rates set by the state, so ask your escrow officer which ones apply to your property.
How to Estimate Your Costs Before Closing
The fastest way to get a real number is to ask a title company for a closing cost estimate based on your price, loan amount and property type. You can also use our closing cost calculator for a starting figure, then request a written quote for your exact transaction. If you are an investor or builder, our title search and examination service shows what a policy will need to cover before you commit.