Refinancing for less

(Money Magazine) -- Question: I'm refinancing my mortgage, and my lender tells me that I need to get a new title insurance policy, which will cost more than a thousand dollars. We haven't made any changes to our home, and there aren't any outstanding liens on the property. Is there any way around this fee?

Answer: There's no way to get out of paying for title insurance altogether. All lenders will require you to purchase a new policy when you refinance, since your current one is only in effect for the duration of that mortgage. This fee is normally 0.5% to 1% of your loan amount.

But if you ask title insurance providers the right questions and shop around for the best deal, you may be able to knock hundreds of dollars off the price.

If it has been less than 10 years since you got your original loan, contact your title search company and ask if you can have your title reissued (also known as a special refinance or substitution rate). This can cut the price by 40% to 70%, depending on whether you use the same lender or a new one and how long it's been since you last had a title search on the property.

Also ask about any other discounts they might provide, such as reduced fees for public service employees or seniors.

You can also ask a title search provider to perform a "quick" search, which mostly hunts down new lien problems that may have occurred since the most recent title search. A quick search could be about 40% cheaper than getting a new policy.

Finally, try buying directly from a title insurance company. Studies show that agent fees can account for about 70% of the cost of title insurance. You can find a list of local independent title insurance companies at the website of title industry trade group American Land Title Association (homeclosing101.org). Or see if your state is one of the 31 covered by new online title insurer EnTitleDirect.com, which sells directly to consumers.

Application fee. Ask that it be waived or credited toward your closing costs. Potential savings: about $300 and up.

Document-preparation fees. These go toward the lender's bottom line. Don't accept them. Potential savings: $150 to $300.

Home inspection. This cost is passed on to you, so ask your lender to shop for a better deal. Potential savings: at least $50.