Your are refinancing your home and you’ve just been told by your mortgage lender that you will have to pay for title insurance again. Most people think that if you buy it once for your home you never have to purchase it again. After all, you’re not moving, only refinancing.
Since Sandler Title specializes in lender refinancing, this is one of the most common questions we get asked by our borrowers. What most of our customer’s don’t realize is the Mortgage Title Insurance Policy purchased on a 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.
The Owner’s title Insurance Policy covers you for any missed title defects. Title defects, such as previous unsatisfied mortgage, judgment and mechanic liens, delinquent land taxes, matters such as fraud, a break in the chain of title (such as a missing heir) can creep up at any time. Your owner’s policy protects you in such an event.
The Mortgage Title Insurance Policy assures a mortgage lender that they have priority over any other lien or interest. The lender has to be in first lien position in the unlikely event it becomes necessary for them to foreclose on the property because of delinquent mortgage payments. Most mortgages are amortized over 10, 20 or 30 years. When that mortgage is paid and satisfied because of a refinance or sale, the title insurance policy is cancelled. If a new mortgage is made, a New Mortgage Title Insurance Policy must be issued for that specific mortgage. The good news is, here at Sandler Title. You are entitled to a generous discount off the standard premium price of the New Mortgage Policy if you currently have an Owner’s Policy (from any title insurance company) in effect.
