Title Insurance Refinance Options

Title insurance is a necessary fact of life when originating new loans, but many homeowners need to get new title insurance when they refinance. Unfortunately, the simple answer is yes.

This type of insurance is an insurance policy issued as part of the closing process when buying a home. It is a policy that protects the lender from any loss that may be sustained if the third party ownership disputes the house after the loan was made.  You can check over here to find more details about title insurance.

Title Insurance Refinance Options

Image Source: Google

Many people are understandably confused about why banks need to be protected against title issues as opposed to homeowners.

Again the answer is simple; until you pay off your mortgage in full, the bank owns your house, not you. And they have a right to protect themselves from the claims against the property that arises from circumstances beyond their control.

If, for example, the house was shared by two people and only one of those signing the deed of transfer at the time of sale, the owner could still claim the half-ownership of the property and file legal proceedings against the bank to collect his or her half of the value. In this case, title insurance will kick in and allow the bank to cover whatever money it was forced to pay the injured party.

Although it is very unlikely that there will be disputes remaining against the original certificate by the time again chosen homeowners to refinance, the new bank will almost certainly require a new title insurance policy issued to protect against claims that may have been conducted on the property since the early sales.