WHY DO YOU NEED TITLE INSURANCE
WHEN REFINANCING YOUR HOME?
WHEN REFINANCING YOUR HOME?
A separate policy is needed by the new mortgage lender that insures them of the validity of your mortgage when it is made.
For as long as you own the property your mortgage is valid, but it doesn’t insure the new mortgage created when you refinance, and it doesn’t provide protection against events that may have transpired between the time you purchased the property and when it is refinance.
For example, you may have taken out a second mortgage on the home that could threaten the priority of the new lender’s mortgage. Creditors or other lien holders can file a claim or have been awarded a judgment at the time of or right after you've taken possession of the property that would not be reflected in the prior title insurance policy. A mechanic’s lien is another type of lien that can be filed against the property by a contractor who did not receive payment for supplies or improvements they made to the property when the work was performed, effecting the priority of mortgage liens.
In addition, Lenders also insist on a new title policy because many mortgages are packaged as securities and sold to investors in the secondary mortgage market. Title insurance is the only practical way to provide the assurance that investors demand and ensure that the mortgages backing the securities are valid and enforceable.
For your refinance transaction with Community Title LLC, you may qualify for a special title insurance rates based off of a valid homeowner’s title insurance policy you currently hold. There may be additional charges for recording fees, closing fees and endorsements if these special rates apply to your transaction. Contact us for more information.