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If you’re thinking about refinancing your home, it’s important to consider all the costs associated with doing so. Even if you will get a lower interest rate, the upfront expenses may or may not cancel out the savings. For example, many homeowners are surprised to learn that they need to purchase another policy from a title insurance agent when refinancing. Below are a few reasons why buying title insurance will be necessary, even if you’re refinancing the same property with the same lender.

There May Be New Title Issues title insurance agent

Regardless of whether you purchased the home two years ago or two decades ago, a lot may have happened since then. By requiring active title insurance to refinance, the lender is protecting their institution from any financial issues that developed after you assumed ownership. Examples include mechanic’s liens for unpaid work and legal judgments. 

The New Loan Will Need a New Policy 

Even if you can prove there are no new title issues, the lender’s protection will expire with the loan. While homeowners retain their title insurance coverage as long as they have ownership, a lender’s coverage is no longer valid once the loan is paid off. And when you refinance a property, you are essentially paying it off and then taking out a different mortgage; you are not modifying the terms of the current mortgage. Therefore, you must purchase new coverage for the lender. 

 

To discuss a mortgage refinance with a title insurance agent, turn to First Financial Title Agency of Minnesota, Inc. Based in Burnsville, MN, they have provided comprehensive escrow services to clients throughout Dakota County since 1989. As an attorney-owned agency, their team is comprised of closers, examiners, and abstracters, who help buyers navigate even the most complicated transactions with ease. And since their knowledgeable staff has more than 400 years of combined experience, you can be sure you’ll be in good hands. To explore all the services they provide, visit their website, and call (952) 831-5010 to discuss your needs with a title insurance agent on their team.

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