If you are refinancing your mortgage your lender will require title insurance when closing on the new mortgage. Here is what you need to know about this insurance policy.
Mortgage lenders require title insurance to protect them against third party claims on a property. Title insurance protects from losses due to a disputed title.
There are two varieties of title insurance. Mortgage lenders require you to purchase title insurance that protects them; this title insurance does not protect the homeowner. The second variety protects the homeowner and is generally not required by the mortgage lender. Lender title insurance expires when the mortgage is repaid; homeowner title insurance is valid for as long as you own your home.
When you apply to refinance your mortgage the lender will order a title search to make sure you are the rightful owner of the property. Your lender will charge you a fee for this title search. The purpose of the title search is to uncover any liens that may have been placed on the property. A lien on the property for example could be for unpaid property taxes.
Title insurance costs vary regionally depending on where you live. You may be able to save money by shopping around for a better deal. Refinancing you mortgage may enable you to find a cheaper rate for your title insurance; the insurance provider may discount the re-issue rate of your policy.
1 comment:
Thanks a lot for posting the basics of this policy. I find this policy a complex option and difficult to understand because there are so many coverage options that deal around with it. I will do follow all your suggestions and try to save money.
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