20
Nov
12

Refinancing? Yes…..you need Title Insurance

So, I have often been asked the question……why do I have to pay for title insurance again? I thought I was told it is one-time fee for the life of the ownership of the home?

Well, yes it is, however what you are now buying is a lender’s title policy for the new lender, but your owner’s title policy is good for as long as you own the home. If you already have an owner’s policy, you can often get a “reissue credit” on any future lenders title policies that you may be required to purchase when you refinance. Also, if you refinance your loan with the same lender, they may provide additional discounts. A mortgage policy is only good for the life of that loan, hence the reason for a new policy on a new loan, even if it’s with the same lender!

Believe it or not, entities can put liens against you and your property without you knowing (i.e. identity theft), this new policy when you refinance will protect the bank and you, in a way that you now are aware of what may have happened since you purchased the property. Since the time that the original loan was made, you may have taken out a second mortgage on the home or had mechanic’s liens, child support liens or legal judgments recorded against you – events that could result in serious financial losses to an unprotected lender. Regardless of the time since you purchased or refinanced your home, a myriad of title defects could have occurred. While you may not have any title defects,
many homeowners do. The only way for a lender to adequately protect itself is to get a new lender’s policy each time you refinance your home.

The ONLY time you may not be required to get a new title insurance is if the current mortgage loan was re-written by that lender, changing terms, interest rates, but NOT the loan amount.

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Jennifer Ferri, Owner

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