Why do you need title insurance when you are refinancing?
Reasons Title Insurance is Needed The policy purchased on refinance covers the new lender, not you. Your title insurance (assuming you got an owners policy when you purchased) remains intact unless you have done something to end the coverage. Two types of Policies are typically issued on residential properties: Mortgage Policy and Owner's Policy. Mortgage Policy covers the lender for the life of the loan. If a new loan number is issued and the current mortgage is paid off, then a new Policy is required. The life of the loan is for as long as the LOAN is in effect. Any time a new loan is obtained and the current loan is paid off, a new Mortgage Policy will be issued. However, the refinance rate is typically lower than the basic rate you may have paid at closing. Owner's Policy protects your interest in the property for as long as you own the property, be that 1 year or 100. It is a one-time fee. However, typically a mortgage policy can be assigned to another lender if the mortgage is sold or assigned on the secondary market. (Note: the loan number would be the same, only the "owner" of the mortgage has changed.)
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Yes. You have to buy a lender's title policy for the new lender. Your owner's title policy is good for as long you own the home. If you have an owner's policy, you can very of…ten get a "reissue credit" on any future lenders title policies that you may be required to buy when you refinance. The Mortgage Policy is only good for the life of the loan. If the current loan is paid off, the policy is no longer needed on the CURRENT loan being paid off. However, the new lender will require a Mortgage Policy on the new loan. The ONLY time you may not be required to get new title insurance would be if the current mortgage loan was re-written by the lender, changing terms, interest rates but not the loan amount. Don't confuse this with a Streamline loan offered by your current lender offering a new interest rate on a new loan, but with low cost closing fees.
Title insurance is usually required by the lender to protect the lender against loss resulting from claims by others against your new home. In some states, attorneys offer tit…le insurance as part of their services in examining title and providing a title opinion. The attorney's fee may include the title insurance premium. In other states, a title insurance company or title agent directly provides the title insurance.. A Lender's Title Insurance policy is usually required when you are refinancing. If you have an Owner's Title policy already (you probably received it with your recorded deed) and can provide the title agent with a copy of it, you can very often get a reissue credit that will greatly reduce the amount of money this lenders title insurance policy will cost you.. To save money on title insurance, compare rates among various title insurance companies. Ask what services and limitations on coverage are provided under each policy. In many states, title insurance premium rates are established by the state and may not be negotiable. Even if the premium rates are not negotiable, many of the title-related fees can vary from company to company and should be compared as well.
If you recently refinanced a California home and paid title insurance on the house two years ago should the new lender charge title insurance?
Title Insurance When Refinancing Yes, 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!
Answer . Your lender may well require title insurance. It protects you too, and it's not usually too expensive in the scheme of things.. Your lender will typically require… a Mortgage Policy coverage for any loan that will be in a first lien position or a high dollar HELOC (Home Equity Line of Credit).. Please note that the Mortgage (Lender's) Policy does NOT cover you.. It covers the lender only, and only for the life of the mortgage. Once the mortgage is paid off, the coverage no longer exists. This is why it is necessary to obtain mortgage title coverage every time you refinance, because you are creating a new lender/new loan interest in the property.. An Owner's Policy covers your interest. If you purchased the house, typically you simultaneously obtain an Owner's Policy and a Mortgage Policy, if a lender was involved.. An Owner's Policy covers all events up to your date of purchase. It is in effect for as long as you own the property.
At least in Ohio, the answer is yes. A new loan policy of title insurance is needed by the lender because they want to be insured up to the new loan amount. If this refinance …is within 10 years of the date you initially took out the loan, your title company may be willing to give you a "re-issue rate", which is about a 30% discount. You need to ask your lender. If they are re-writing the existing loan, they may simply ask for upgraded Mortgage policy and have you pay the difference for the new loan amount based on the local rates/fees. If you are paying off the existing loan, then they will require a new Mortgage Policy. You must remember that a Mortgage Policy is only good for the life of the loan, so once it is paid in full (even from a refinance with the same bank) the mortgage title policy ceases to exist. Most states offer a refinance rate which is calculated on the new loan vs the original amount of the current loan. The above answer is pretty thorough - just check with your lender/local title agency to find out what the fees are for your state.
Answer . \nIt is normally a condition of most real estate sales contracts, or the lender providing the funds.
Yesm, as a buyer of property (even with a warranty deed), you should require the seller to obtain title insurance to back up its claim of ownership. Otherwise, when you receiv…e their worthless ownership in the form of a deed, without title insurance, you might never recover the cost of the property, when it happens to belong to someone else you never heard of. Similarly, as a buyer, you will want title insurance for your own peace of mind; knowing that you won't have to pay to quiet title, or sue the sellers on the warranty, in the event there is ever a dispute. As a lender, you must insist on title insurance, to protect the value of your security interest against seizure by someone with a better claim than your borrower.
Although you are only required to cover the loan amount it is in your best interest to cover your investment as well, if anything was to happen only your bank would be paid an…d you would loose your down payment. We suggest you insure your equity so that your biggest and best asset is covered.
In Texas you do.
Typically, a Loan/Mortgage policy cannot be transferred to a new loan as the title coverage is unique to each loan. The mortgage coverage on a loan ends when the loan is paid… off and satisfied, that is why new coverage is taken out on the new loan. However, in the case of a Mortgage Modification of an existing loan, the coverage may be extended to cover the existing loan and the new loan amount of the Modification. There would still be title charges for the changes in the Mortgage Modification coverage in most cases.
It depends on the state. In some states, where there are no licensing requirements to be a title agent/title agency, anyone can sell and effect title insurance without any …special requirements or licensing. Other states require specific title licensing (like New Jersey), and an attorney must also have a title license in order to effect and sell title insurance. Additionally, states like MA require that in order to be a title agent, you must be also be an attorney. Check with your state's licensing requirements for specific details.
In Vehicle Titles
Most insurance companies will not need a copy of the title. That's because we generally have our own means of verifying the title and ownership. If the company does request a… copy of your title it is usually because when they went to verify the vehicle information with the state, it came back as a mismatch or a no hit.
In Auto Insurance
In most states, yes.
In Title Insurance
There are no laws requiring a person to take out title insurance on their property. However, it's wise to, at the very least, have a Report on Title (Search only) done on t…he property before you purchase. This is not title insurance, but a compliation of all searches for existing deeds, mortgages, liens, status of municipal liens, easements, restrictions, etc. After obtaining the Report on Title, you can decide if you are comfortable with the property status to proceed with or without getting an Owner's Policy to protect you against the history of the property as to all of the above.