The Importance of Title Insurance Even When Refinancing

What is a refinance? Why do we need Title Insurance? Even on an initial home purchase, title insurance is something that could save you from unforeseen circumstances!

But first, let’s get back to the basics.

Different policies are issued when purchasing and refinancing. An Owner’s Title Insurance Policy protects the insured’s interest. It makes sure that the insured owns the property without anything attached that could adversely affect title from a prior owner–it protects an owner from the past.

            The owner’s policy of title insurance is issued at the time of the home purchase. This policy is valid and in place as long as ownership does not change–all without any additional premiums due, like for homeowner’s insurance. The policy is paid in full when the buyer closes on their original purchase. If ownership were to change sometime down the line, for instance transferring the property into a trust, the original owner’s policy would no longer provide them with coverage. They could purchase a new owner’s title insurance policy protecting the trust’s ownership of the property.

            Now, about refinancing: when a buyer refinances, it does not give them a new owner’s policy. However, the homeowner can use their owner’s title insurance policy when refinancing to receive a reissue credit on the loan policy that would be required by the lender at the time of refinance. Basically, a borrower can save money any time they refinance! A borrower can use their owner’s title insurance policy for a reissue credit–whether it’s right after the home purchase, or many years down the road.

Essentially, it is important that a borrower understands that their owner’s title insurance does more than just insure ownership, that policy can save them money when refinancing. It is something many borrowers overlook, not knowing it is even available to them.

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