Considering refinancing your home loan? You may encounter a variety of fees even if you go to the same loan lender. In fact, you will probably have to pay closing costs including title insurance fees. That is why understanding why title insurance is such an integral part of the refinancing process is so important.
A Refresher On Title Insurance
Most homeowners are unaware of what title insurance is. In fact, most homeowners disregard title insurance as an unimportant tool. However, this could not be further from the truth.Title insurance is critical to homeowners and lenders alike. When you purchase title insurance, you end up paying a one-time fee at your settlement. However, the title insurance is valid throughout your ownership of the property. On the other hand there are lender’s title insurance policies. In these instances, every time you refinance your loan encumbering your property, the lender requires that you purchase a lender’s title insurance policy. This occurs because the lender wants their interest protected. Therefore, the title insurance policy is a document that provides you with certain assurances for your property. As mentioned previously, there are two different title insurance policies available: a lender’s policy and an owner’s policy, protecting a lender and a homeowner respectively. A title insurance policy protects both parties against any title defect or omission involved in any real estate transaction.
Why Is Title Insurance Necessary For A Refinance?
Typically, title insurance protects your interest and your lender’s interest in the property. During a refinance transaction a property is released from the encumbrance of a previous lender and is encumbered by a new lender. When a lender is involved a title insurance lender’s policy is always a requirement. Hence, why every time you go to refinance your home and are dealing with a lender you will need title insurance. Without it, no lender will provide you an option of refinancing your property. More often than not, a lot happens since the first time you purchased your property. As a result, new liens or various judgments could have occurred on your title. Therefore, it is in these instances that title insurance becomes critically important.
A Title Company You Can Trust: Colony Title
At Colony Title, we will help you through the process of getting your property’s title and help you avoid the pitfalls of hidden costs while you buy your home. We are also well trained in identifying any and all errors in public records and helping you resolve them. We specialize in real estate title insurance in both Maryland and Washington, D.C., and we will perform an expert title search, check through all past documentation, and examine records for any fraud or forgery. For more information on how we can get you into the home of your dreams, contact us online or give us a call at (410) 884-1160. To get more updates on housing markets and how to get into your home, follow us on Facebook, Twitter, LinkedIn, and Google+.