Why You Need Title Insurance on a Refinance

From Forgeries to Estate Tax Liens:
How Title Insurance Covers You Against Unexpected Title Defects

Refinancing? Don't Forget Title Insurance to Protect Your Investment

When you refinance your home, it's essential to ensure that your investment remains secure. Title insurance plays a crucial role in protecting your property rights during the refinancing process. By obtaining a new lender's title insurance policy, you can safeguard your lender's interest and prevent potential title issues from derailing your refinance. Our knowledgeable team is here to help you navigate the title insurance refinance process, ensuring a smooth and stress-free experience. Reach out to us today to discover how title insurance can provide you with the confidence and security you need as you embark on your refinancing journey.

Understanding the Role of Title Insurance in Refinancing

When you refinance your home, you may wonder why you need to purchase a new lender's title insurance policy. After all, you already had title insurance when you first bought your home. However, it's important to understand that the original title insurance policy was specific to your initial mortgage loan.

As you prepare to refinance, it's crucial to recognize the significance of obtaining a new title insurance policy to protect your lender's interest in the property. Let's delve into the reasons why a new lender's policy is necessary and how it benefits both you and your lender.

Why Do I Need to Purchase a New Lender’s Policy?

The original lender’s title insurance policy protects the lender’s interest on the original loan. With the new refinanced loan, the original loan will be paid off, and the new lender will require protection of its interest for the new loan. From the lender’s standpoint, a refinanced loan is no different than any other mortgage loan. In addition, if the loan is sold in the secondary market, investors like Fannie Mae will require the security of title insurance on the property. The good news is that in many circumstances discounts applied to the premiums charged for lender’s policies for refinance may be available. If your refinanced loan is with the same lender as your original loan, discounts may apply.

Didn’t the Original Title Search Resolve Ownership Issues?

The lender needs the title examined again to make sure that no new liens or judgments, such as liens filed by contractors, child support liens, legal judgments, or other encumbrances have been recorded since you purchased your home . Providing your lender with title insurance protects the lender’s security interest in your property.

Do I Also Need to Get a New Owner’s Title Policy?

You’ll be glad to know that our original owner’s title insurance policy protects your ownership rights for as long as you own your property so there’s no need to get another owner’s policy on a refinance loan.

A picture of a mother & daughter sitting happily on a couch with text added to the image which explains why Title Insurance is needed on a home refinance

Some Reasons Why You Need Title Insurance:

  • For claims covered by the title policy, title insurance covers attorneys' fees and court costs for defending your title.
  • Title insurance may help speed negotiations when you're ready to refinance your loan or sell your home.
  • For claims covered by the title policy, title insurance indemnifies you for losses due to title defects.
  • Each title insurance policy we write is paid in full by the onetime premium charged at closing and is good for as long as you own the property.
  • A deed or mortgage in the chain of title may be a forgery or signed by a person under age.
  • A deed or mortgage may have been procured by fraud or duress.
  • Title transferred upon the death of a prior owner may be subject to a federal estate tax lien, or an heir may appear and claim an interest in the property.
  • A prior spouse may claim an interest in the property.

If you want the protection of title insurance, you can discuss available options with one of our officers by contacting one of our DFW Title Offices.

Protect Your Investment During Refinancing

Ensure a smooth and secure refinancing process by obtaining a new lender's title insurance policy. Safeguard your property rights and learn more about the comprehensive benefits of title insurance for homeowners.