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Title Insurance When Refinancing Your Loan

Lower interest rates have motivated you to refinance your home loan. The lower rate may save you a tremendous amount of money over the life of the loan, but you should also expect to pay the lender the typical closing costs associated with any new loan, including service fees, points, title insurance protection and other expenses.

Why do I need to purchase a new title insurance policy on a refinanced loan?

To the lender, a refinance loan is no different than any other home loan. So, your lender will want to insure that their new loan is protected by title insurance, just as the original lender required. Therefore, when you refinance you are buying a title policy to protect your lender.

Why does a Lender need title insurance?

Most lenders generate loans and then immediately sell those loans to secondary market investors, such as FannieMae.

FannieMae, in order to protect its security interest in the loan, requires title insurance coverage. Even those lenders who keep original loans in their portfolio are wise to get a lenders policy to protect their investment against title related defects.

When I purchased my home, didn’t I also buy a lender’s policy?

Perhaps. Who pays for the lender’s policy on a purchase loan varies regionally and by the terms of individual contracts.

However, even if you did buy a lender’s policy when you purchased your home, the lender’s policy remains in force only during the life of the loan that was insured. If you refinance, the old loan is paid off (the “life” of the loan expires) and a new loan is issued for which the lender will require a new title insurance policy.

What about my original title insurance policy?

When you bought your home, you purchased a Homeowners title policy. The Homeowners’ policy stays in force as long as you or your heirs own the home. When you refinance, your lender will often require that you purchase a new lender’s policy to protect their new security interest in the property. Thus, you are buying a policy to protect your lender, not a new Homeowner’s policy.

What could possibly have happened since I purchased my home which warrants a new lender’s policy?

Since the time that the original loan was made, you may have taken out a second trust deed on the house or had mechanic’s liens, child support liens or legal judgments recorded against you - events that could result in serious financial losses to an unprotected lender. Regardless if it has been only 6 months or less since you purchased or refinanced your home, a myriad of title defects could have occurred. While you may not have any title defects, many Homeowners do. The only way for a lender to adequately protect itself is to get a new lender’s policy each time you purchase or refinance your home.

Are there any discounts available for title insurance on a refinance transaction?

Yes. Title companies offer a refinance transaction discount or a short-term rate. Discounts may also be available if you use the same lender for your refinance loan and your original loan. Be sure to ask your title company how they can save you money.

Article by CLTA

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Testimonials

11/2018 
 
We bought our Kona home in November 2018 and are so grateful we worked with Lance and Kimi. We started working with them in the spring of 2018, when we visited Kona and Lance took us to see many properties and informed us about microclimates and different neighborhoods. Then we headed backed to Boston and Lance kept in touch with us about listings, the market, and the vog. One time he texted us a picture of a gorgeous clear day, and a few days later he texted a picture of a voggy day, saying he wanted us to see that too - that's the kind of people Lance and Kimi are, honest and upfront. Once we found a home their guidance and hard work were absolutely indispensable to us. Great negotiating skills, responsiveness to our many questions and concerns via text, email and Skype, and through the entire closing process holding our hands and digging up and/or checking all documents with our best interests in mind. There was so much to keep track of and so much we weren't even aware of that needed to be checked, we are beyond grateful that we worked with Lance and Kimi. They are experienced, knowledgeable, efficient, thorough, professional, and kind.
You can't go wrong with Lance and Kimi!

 
Denise & Joe  
2/19/2019
Lance, we love that your client has an agent who cares about them the way you do.
Love the idea of sharing the shifting market guide this way, and love even more your commitment to guiding and advising your clients through the buying/selling process. We are grateful to be your partner! 
Yours truly
Keeping Current Matters 
Charlotte P. H.

8/31/2018
What an outstanding experience we had with Lance Owens and Kimi Nagatoshi!! We gave Lance our thoughts about what we might be looking for in a new home on Hawaii Island and he showed us quite a number of places that fit that description. We hadn't thought we'd actually buy on that trip -- we were really only trying to see what we could afford -- but with what Lance showed us, we ended up putting an offer in after only 3 days of looking. And then Kimi went to work helping us through the entire process of the inspection, counteroffers, and, ultimately, the purchase. It's our dream home and we have both Lance and Kimi to thank! 
Karl and Mary 

Source: Realtor.com

Karl and Mary


8/30/2018
8/17/2018 
7/13/2017
5/22/2017
Lance and Kimi did a fantastic job selling our multiple lots in Kau. We continue to recommend Lance and Kimi to our friends!

Source: realtor.com

Kathy and John C.
5/18/2016 Aloha Lance! Thank you all for your “local kine” support of the Big Island Chocolate Festival this year. It was really very successful and your support helped us keep the ball rolling as we brought tickets in. I will let you know how much was raised for the schools, but wanted you to see this online news story that mentions your sponsorship. Hawaii 24/7 has quite a large readership. Thanks again! http://www.hawaii247.com/2016/05/15/big-island-chocolate-festival-names-top-confections/ Julie Ziemelis-Owner Ziemelis Communications Integrated Communications Expert-PR
2/29/2016 In 15+ years of Hawaii Mortgage Company dealing with thousands of realtors, it is very rare when you come upon agents who really care and love what they do and want to make the transaction as wonderful as possible for all parties involved. Lance and Kimi go above and beyond for their clients and the mortgage professionals (like us!) who they are working with. In a world full of mortgage regulations, Lance and Kimi make sure to keep everyone on track of the timelines to ensure closing on time, which benefits both the sellers and buyers. We are lucky to work with them and look forward to many more transactions together in the future! Maura K. Shannon Manager / Mortgage Loan Originator NMLS #339190 Hawaii Mortgage Company NMLS #232582 443 Portlock Road Honolulu, Hawaii 96825 Tel: 808-988-6622 Fax: 808-988-7722 Maura K. Shannon
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Kona Home Team
 Lance Owens RS-62947 | 808-936-8383 
Kimi Nagatoshi RS-76851 | 808-936-2575
LUVA LLC | RB-21030 | Office ID 2340 | Office 808-769-5111
75-240 Nani Kailua Dr. Suite 8, Kailua Kona, HI 96740