The Rule That Could Save You Big Bucks On Your Next Refinance (And Why You Shouldn't Wait)

Only a few years into your property ownership and already facing yet another round of closing costs to refinance their property? It’s a tough (and expensive) pill to swallow! You likely already paid a loan origination fee, appraisal fee, flood certificate, and title insurance premiums and you certainly don’t want to do that again.  Fortunately, in Texas, there is one rate rule available that allows for a reduction in the premium for the title insurance policy that the new lender will require.

Introducing the R8 Credit Rule

Meet your new friend: The R8 Credit Rule. This states that a discount is to be given on the Mortgagee's Title Policy (MTP) premium if the new loan is to fully renew and extend an existing lien for which a title policy was already provided, and that loan was less than eight years ago.  The credit decreases as time passes, and after eight years no credit can be given. Did we lose you? Here’s the layman’s terms: if a loan was originated, closed and funded less than eight years ago and then is being refinanced and fully paid off by a new loan now, a credit will be given.

Getting Credit Where Credit’s Due

Let’s learn more about this potential credit! Effective September 1, 2019, the Rate Rule R-8 (“R-8 Credit”) was revised to increase the premium reduction to 50% if the age of the existing Loan Policy is within the last four years, and 25% if the age of the existing Loan Policy is more than four years and less than eight years. There isn’t any reduction in premium if the age of the existing Loan Policy is eight years or more but if you fall into that range, we’d love to help you learn more about taking advantage of the R8 Rule.

Contact the MW Law – Alamo Title team to learn more about how you can save money on your next closing!