Refinancing and Title Insurance

Last week we talked about two types of Title Insurance . In this posting
we discuss what you need to do for your Title Insurance while refinancing.

A new owner's title policy is not needed when the owner refinances a
mortgage. If you refinance your mortgage, the lender will require a new
lender's title policy even if you bought your house or condo or refinanced
your mortgage within the last few years.

The reason is intervening liens might have occurred, which will create a
title risk for the lender when you refinance. For example, maybe you
forgot to pay the plumber who fixed the pipes and he recorded a
mechanics' lien against your title. Or perhaps a creditor obtained a
judgement against you, which was recorded as a lien affecting your home.
If you got into a tax dispute with the IRS, there might be a recorded
federal income tax lien, which affects your home's title.

If your home was purchased or refinanced within the last few years, in
most states when you refinance your mortgage, you can obtain a
substantial lender's title insurance discount. But many title insurers
"forget" to offer this discount unless you remember to ask for the
discount. If you purchased or refinanced your home many years ago, you
might not be entitled to a lender's title policy discount. Yet it is better to
ask.