If you are refinancing your mortgage your lender will require title insurance
when closing on the new mortgage. Here is what you need to know about this
insurance policy.
Mortgage lenders require title insurance to protect them against third party
claims on a property. Title insurance protects from losses due to a disputed
title.
There are two varieties of title insurance. Mortgage lenders require you to
purchase title insurance that protects them; this title insurance does not
protect the homeowner. The second variety protects the homeowner and is
generally not required by the mortgage lender. Lender title insurance expires
when the mortgage is repaid; homeowner title insurance is valid for as long as
you own your home.
When you apply to refinance your mortgage the lender will order a title
search to make sure you are the rightful owner of the property. Your lender will
charge you a fee for this title search. The purpose of the title search is to
uncover any liens that may have been placed on the property. A lien on the
property for example could be for unpaid property taxes.
Title insurance costs vary regionally depending on where you live. You may be
able to save money by shopping around for a better deal. Refinancing you
mortgage may enable you to find a cheaper rate for your title insurance; the
insurance provider may discount the re-issue rate of your policy
