Why do you need title insurance when you are refinancing?

Reasons Title Insurance is Needed

The policy purchased on refinance covers the new lender, not you. Your title insurance (assuming you got an owners policy when you purchased) remains intact unless you have done something to end the coverage.

Two types of Policies are typically issued on residential properties: Mortgage Policy and Owner's Policy.

Mortgage Policy covers the lender for the life of the loan. If a new loan number is issued and the current mortgage is paid off, then a new Policy is required.

The life of the loan is for as long as the LOAN is in effect.

Any time a new loan is obtained and the current loan is paid off, a new Mortgage Policy will be issued. However, the refinance rate is typically lower than the basic rate you may have paid at closing.

Owner's Policy protects your interest in the property for as long as you own the property, be that 1 year or 100. It is a one-time fee.

However, typically a mortgage policy can be assigned to another lender if the mortgage is sold or assigned on the secondary market. (Note: the loan number would be the same, only the "owner" of the mortgage has changed.)

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