Back to Table of Contents

Title Insurance When Refinancing Your Loan

Lower interest rates have motivated you to refinance your home loan. The lower rate may save you a tremendous amount of money over the life of the loan, but you should also expect to pay the lender the typical closing costs associated with any new loan, including service fees, points, title insurance protection and other expenses.

Why do I need to purchase a new title insurance policy on a refinanced loan?

To the lender, a refinance loan is no different than any other home loan. So, your lender will want to insure that their new loan is protected by title insurance, just as the original lender required. Therefore, when you refinance you are buying a title policy to protect your lender.

Why does a Lender need title insurance?

Most lenders generate loans and then immediately sell those loans to secondary market investors, such as FannieMae.

FannieMae, in order to protect its security interest in the loan, requires title insurance coverage. Even those lenders who keep original loans in their portfolio are wise to get a lenders policy to protect their investment against title related defects.

When I purchased my home, didn’t I also buy a lender’s policy?

Perhaps. Who pays for the lender’s policy on a purchase loan varies regionally and by the terms of individual contracts.

However, even if you did buy a lender’s policy when you purchased your home, the lender’s policy remains in force only during the life of the loan that was insured. If you refinance, the old loan is paid off (the “life” of the loan expires) and a new loan is issued for which the lender will require a new title insurance policy.

What about my original title insurance policy?

When you bought your home, you purchased a Homeowners title policy. The Homeowners’ policy stays in force as long as you or your heirs own the home. When you refinance, your lender will often require that you purchase a new lender’s policy to protect their new security interest in the property. Thus, you are buying a policy to protect your lender, not a new Homeowner’s policy.

What could possibly have happened since I purchased my home which warrants a new lender’s policy?

Since the time that the original loan was made, you may have taken out a second trust deed on the house 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 if it has been only 6 months or less 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 purchase or refinance your home.

Are there any discounts available for title insurance on a refinance transaction?

Yes. Title companies offer a refinance transaction discount or a short-term rate. Discounts may also be available if you use the same lender for your refinance loan and your original loan. Be sure to ask your title company how they can save you money.

Article by CLTA

Back to Table of Contents

Thank you for visiting today. If this is your first visit, take your time and look around. We have plenty of information and resources available to you. If you are a return visitor, thank you. We would love to hear from you and tell you how we can serve all your real estate needs.

Tom Scrocco And Randy Isaacs
Realtor - Associates
Douglas Elliman Real Estate
Palm Springs & Beverly Hills
 PLEASE CALL US ANYTIME:
Los Angeles 310-259-7355 
Palm Springs 760-656-8751

Info@TomandRandyProperties.com
BRE: 01245433, BRE: 01252713

Testimonials

It is a pleasure to recommend the exceptional real estate services of Randy and Tom, two of the most professional and adroit real estate agents with whom we have been lucky enough to work. Having seen their name while driving through the city of Palm Springs, we knew of their services but it was when we received a brochure in the mail from Randy and Tom, describing another home they recently sold, that we felt they would be a perfect fit for us. The brochure was the epitome of elegance, from the beautifully articulated descriptors to the superb photography to the high-quality paper stock. After interviewing them and a few other real estate agents, we knew for certain we would be in excellent hands with Tom and Randy due to their luxury real estate experience in working with clients in the Palm Springs area, extensive knowledge of the market and their determination to achieve outstanding results. Randy and Tom never disappointed. Phone calls and emails were immediately returned, showings took place quickly, negotiations with the buyers intelligently and fairly managed, and the deal meticulously completed. If we ever should move to the Palm Springs area again, Randy and Tom will be our surefire choice in real estate agents. Sincerely, Lawrence Greifer President Luxury Management Group
From our first meeting Tom and Randy presented a perfect combination of professionalism and personal warmth. Their knowledge of the real estate business is comprehensive, and their concern for my particular needs was exemplary. They guided me through the entire process in language that made things clear to me, and through the entire process to the closing of escrow were available with expert advice and instructions. I cannot recommend them highly enough. C. Steven Smith, Producer
Randy and Tom- “It was a pleasure doing business with you. You made a difficult situation easy and painless! And we couldn't be happier with the price you obtained. Very good job!! We've already recommended you once and will certainly do it again. You were professional, caring, understanding and supportive. We thank YOU from the bottom of OUR hearts! Thank you for getting the best deal for us, including the 60 day stay. We could not have asked for more!” David and Rachelle, Producer
Tom/Randy/Cameron: Thank you all for handling the sale of my parents house in such a professional manner. The Escrow went extremely smoothly without any hitches at all. The personalized attention and advice I got throughout the entire process was second to none.You guys truly are the best. When the time comes for me to sell my own property, I will definitely know who to call. A special thanks to Randy for listening to and working with me through all the “family drama” regarding the sale. Thanks again. Cheryl Marlowe, Traffic Manager KTLA
Tom and Randy...Thank you for the BRILLIANT job you did selling our duplex!...You two possess a unique combination of razor-sharp professionalism and comforting human warmth. You were the best advocates anyone could ever want, and you obtained a better sale than we could ever have imagined. Kristin and Patrick
View All

2018 DOUGLAS ELLIMAN REAL ESTATE. ALL MATERIAL PRESENTED HEREIN IS INTENDED FOR INFORMATION PURPOSES ONLY. WHILE, THIS INFORMATION IS BELIEVED TO BE CORRECT, IT IS REPRESENTED SUBJECT TO ERRORS, OMISSIONS, CHANGES OR WITHDRAWAL WITHOUT NOTICE. ALL PROPERTY INFORMATION, INCLUDING, BUT NOT LIMITED TO SQUARE FOOTAGE, ROOM COUNT, NUMBER OF BEDROOMS AND THE SCHOOL DISTRICT IN PROPERTY LISTINGS SHOULD BE VERIFIED BY YOUR OWN ATTORNEY, ARCHITECT OR ZONING EXPERT. EQUAL HOUSING OPPORTUNITY 

Equal Housing OpportunityMLS membershipREALTOR® certification