Lower interest rates have motivated you to refinance your home loan. The lower rate may save you a tremendous amount of money over the life of the loan, but you should also expect to pay the lender the typical closing costs associated with any new loan, including service fees, points, title insurance protection and other expenses.
To the lender, a refinance loan is no different than any other home loan. So, your lender will want to insure that their new loan is protected by title insurance, just as the original lender required. Therefore, when you refinance you are buying a title policy to protect your lender.
Most lenders generate loans and then immediately sell those loans to secondary market investors, such as FannieMae.
FannieMae, in order to protect its security interest in the loan, requires title insurance coverage. Even those lenders who keep original loans in their portfolio are wise to get a lenders policy to protect their investment against title related defects.
Perhaps. Who pays for the lender’s policy on a purchase loan varies regionally and by the terms of individual contracts.
However, even if you did buy a lender’s policy when you purchased your home, the lender’s policy remains in force only during the life of the loan that was insured. If you refinance, the old loan is paid off (the “life” of the loan expires) and a new loan is issued for which the lender will require a new title insurance policy.
When you bought your home, you purchased a Homeowners title policy. The Homeowners’ policy stays in force as long as you or your heirs own the home. When you refinance, your lender will often require that you purchase a new lender’s policy to protect their new security interest in the property. Thus, you are buying a policy to protect your lender, not a new Homeowner’s policy.
Since the time that the original loan was made, you may have taken out a second trust deed on the house or had mechanic’s liens, child support liens or legal judgments recorded against you - events that could result in serious financial losses to an unprotected lender. Regardless if it has been only 6 months or less since you purchased or refinanced your home, a myriad of title defects could have occurred. While you may not have any title defects, many Homeowners do. The only way for a lender to adequately protect itself is to get a new lender’s policy each time you purchase or refinance your home.
Yes. Title companies offer a refinance transaction discount or a short-term rate. Discounts may also be available if you use the same lender for your refinance loan and your original loan. Be sure to ask your title company how they can save you money.
Article by CLTABack to Table of Contents
DON'T MISS A NEW LISTING AGAIN!
FREE AUTOMATED EMAIL UPDATES
The HSMLS Data on this site was last updated: 2019-07-16.
Information deemed reliable but is not guaranteed.
The data relating to real estate for sale on this web site comes in part from the Hot Springs Data Share Program of the Hot Springs Multiple Listing Service. Real estate listings held by Brokerage firms other than Hot Springs Realty are marked with the HSDS logo and detailed information about them includes the name of the listing brokers.
Information provided is for consumer\'s personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. This site will be monitored for \'scraping\' and any use of search facilities of data on the site other than by a consumer looking to purchase real estate, is prohibited. The listing broker has attempted to offer accurate data, but buyers are advised to confirm all items.
Copyright 2019 Hot Springs Multiple Listing Services of the Hot Springs Board of REALTORS.
Cooperative Arkansas REALTORS® Multiple Listing Services, Inc.© 2019. All rights reserved. Information deemed reliable, but not guaranteed. Some properties which appear for sale on this web site may subsequently have sold and may no longer be available. The data relating to real estate for sale on this web site comes in part from the Broker ReciprocitySM Program of the Cooperative Arkansas REALTORS® Multiple Listing Services, Inc. Real estate listings held by brokerage firms other than Hot Springs Realty are marked with the Broker ReciprocitySM logo and information about them includes the name of the listing brokers. Broker ReciprocitySM information is provided exclusively for consumers' personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Listing broker has attempted to offer accurate data, but buyers are advised to confirm all items.Listing information last updated on 2019-07-16 06:21:00