If you recently refinanced a California home and paid title insurance on the house two years ago should the new lender charge title insurance?

Answer 1

Title Insurance When RefinancingYes, it's a standard requirement and closing cost. No matter how many times you refinance you will have to pay title insurance everytime and a title search. It protects you and your home ownership rights as well as protecting the bank and letting them know that you actually own the home and if there are any other liens on the home that may need to be paid off or that may interfere with their lien position.

I explain it to my clients as simple as this... you pay for car insurance every year and in most cases your car insurance is more than the title insurance... but which is worth more to you, your home or your car?

Addendum to : ;

Actually, the reason you are required to buy a Mortgage Policy when you refi is because you are buying new coverage for the new lender.

When you bought your home, you took out 2 policies: 1 covering you for as long as you own the property (Owner/Fee Policy) and 1 covering the lender doing the initial purchase mortgage (Mortgage Policy).

The Mortgage Policy is only good for the life of the loan. So once a loan is paid off, the coverage expires since it covered the LENDER'S interest and the loan amt.

When a new loan is obtained, a new policy is issued covering that loan only.

So, when you refinance a home, the reason you are required to buy a new Mortgage Policy is because you are getting a new loan and the lender requires the insurance as part of their underwriting conditions to make sure their interests are protected.

The loan policy does not cover you in any way, only the lender. Your OWNER'S POLICY, a one time fee when you purchased your home, covers you for as long as you own the property.

Hope that makes the issue a little clearer.

:When refinancing, you most likely already have in your possession an owners title insurance policy from when you purchased your home. Now you are refinancing and you should not have to pay the full premium on the new lenders policy if you present the title company handling the refinance a copy of that owners title policy. They are obligated, depending on the department of insurance rules pertaining to reissue credit in that state and the amount of time you owned the home to give you what is call a reinsurance or reissue rate on this new lenders policy. Don't get ripped off, make sure you ask about reissue credit!

Also, if you are refinancing with the same lender on the same property for which you already have a mortgage, you may be able to obtain an even bigger credit. After all, they are basically copying most of the existing title policy and all but recent history on the property has already been insured. You also do not have to use the same title company that issued your owners title policy in order to get a reissue credit.

This is the another very good reason to compare companies, title insurance rates, and title insurance related fees before you go to closing and another reason to pick your own title insurance agent long before you incur any fees whatsoever!