Why you need it again
A refinance pays off your old loan and creates a new one. The old lender's title policy ends with the old loan, so the new lender needs its own coverage. It protects the lender if a problem with the home's title, such as an old lien or a recording error, comes to light later.
What lender's title insurance covers
The lender's policy covers the lender's interest in the home up to the loan amount. If a covered title problem from before the policy date surfaces later, the policy pays to defend or settle the claim. It doesn't protect your own equity; that is what your owner's policy is for.
What a title search looks for
Before closing, a title company searches public records for anything that could cloud ownership. This step also catches issues that came up since you bought the home.
- Unpaid liens, such as tax or contractor liens
- Court judgments against an owner
- Errors or gaps in recorded documents
- Other recorded claims against the property
What about your owner's policy?
The owner's policy you bought at purchase generally protects you as long as you own the home. You usually don't need a new one to refinance. Keep a copy of it with your important papers.
What it costs
Lender's title insurance is a one-time premium paid at closing. The price depends mainly on your loan amount and on rules in your state. Some states offer a reissue discount if you refinance within a few years of your last policy. Rules vary by state, so ask the title agent.
On a refinance, you generally pay only for the lender's policy, which often costs less than the owner's and lender's policies together at purchase.
How ZERO Closing Costs covers title
CapCenter refinances come with ZERO Closing Costs (restrictions apply). That includes lender's title insurance and the title search when they are required and provided by our approved agent. The settlement agent fee is covered on the same terms.
If you choose a different title provider, you may pay those fees yourself, so ask your loan consultant before you decide.
If the search finds a problem
Most issues can be cleared before closing. The title company may ask for a payoff letter, a lien release or a corrected document. Tell your loan consultant early about any liens, judgments or ownership changes you know of, such as a divorce or a death on the title.
