Refinancing
Settlement services and title insurance aren’t only important when you purchase a home, it’s also a major part of refinancing. If you're considering refinancing your home, you may be wondering if it's worth using a settlement company for your refinance closing. A settlement company is a valuable resource to help streamline the closing process and ensure that everything goes smoothly.
I purchased Title Insurance when I bought my home, why am I paying for it again when I refinance?
When you purchase a home, you typically purchase a lender's title insurance policy to protect the lender's interest in the property. This policy is paid for at the time of the home purchase and covers the lender for the duration of the mortgage. You likely also purchased an owner’s policy - this is still active even when you refinance your home.
However, when you refinance your home, you are essentially getting a new mortgage with potentially a new lender. This means that your original lender's title insurance policy no longer applies, and your new loan will require a new lender's title insurance policy to protect the lender’s interest in the property.
Additionally, when you refinance, there may be new title issues that arise that were not present when you initially purchased the property. For example, a lien may have been placed on the property since you purchased it, or there may be errors in the public records that were not discovered previously. In order to protect against these potential issues, your new lender will require a new title search and title insurance policy to ensure that the title to the property is clear and free of any defects.
While it may seem frustrating to have to purchase title insurance again when refinancing, it is a necessary step to protect your new lender's investment in the property and ensure that there are no issues with the title that could impact your refinancing process. We also recommend that if your property has increased significantly in value, you may want to purchase an updated owner’s title insurance property to cover the difference.
Pay extra attention to the following items when working on a refinance transaction so that you can ensure that any changes from your purchase to your refinance are accounted for.
Confirm the spelling of your names, change of any names (marriage/divorce), and the addition or deletion of anyone from the title.
It is very important that all parties arrive with valid photo ID on closing day.
The names listed on the documents MUST match the names on the presented identification. The signatures MUST match how the names are typed on the closing documents.
Please also make us aware of any subdivision, property boundary, easement, or covenant updates to your property.
