Do I Need Title Insurance on a Refinance?

When you purchase a home or refinance a current mortgage, your investment will have to undergo a title search to uncover any potential threats to the title. For what is likely the biggest purchase you’ll ever make, title insurance will provide the safety you’ll want in making such an important investment. If a title search does happen to uncover a defect, you’ll be grateful you purchased title insurance! There are two types of title insurance: owner’s title insurance and lender’s title insurance. If you’re refinancing, you’ll be required to purchase lender’s insurance, but not owner’s insurance and here is why.

Two Types of Title Insurance

As mentioned, there are two types of title insurance policies necessary to close on the sale of a home. Owner’s title insurance is important because it protects the buyer/owner of the property if someone comes forward saying they have a claim on the property. While it may seem like an unnecessary financial burden at first, you’ll be thankful you did if a threat is uncovered. It insures the buyer against someone who tries to sue, if there’s a previously unknown lien against the home, etc. It certainly provides peace of mind when your greatest asset could be at risk.

Lender’s title insurance protects the security interest of the lender who assigned the loan needed to purchase the property. The buyer of the property generally pays for this policy. One reason this is necessary is because if the buyer doesn’t make the agreed upon mortgage payments, the lender can then foreclose the property and sell it. If there are any issues with the title, they won’t be able to do this, which puts the lender at risk of a major financial loss. With so many different threats toward a loan getting repaid, a lender will want to make sure they’re well protected.

Why do I need title insurance on a refinance if the property isn’t changing ownership?

If you’re simply refinancing a home you already own, many wonder why their original title insurance policy isn’t applicable. If you’re refinancing a current mortgage, your original owner’s policy should hold true through the refinance (though it’s always wise to check). However, because when you refinance, your old mortgage gets paid off and disappears and a new mortgage is created — your lender is no longer protected. A new policy will protect against any defects or new events that may have come to the surface since the time you purchased the home. It also protects against anything that could have been missed during the original title search performed.

Purchasing a new home or refinancing one you already own brings a lot of questions to the surface. If you’re purchasing or refinancing, Supreme Title is here to help!


Supreme Title makes no representations or warranties with respect to the accuracy or completeness of the matters addressed. 

Please contact Supreme Title with questions you may have.  or reach us by phone at:  321-725-0115