Why Title Insurance Is Needed When Refinancing a Mortgage Loan
Today's lower interest rates have
spurred you to refinance your mortgage. Now you can
expect to reap the benefits of substantially reduced
monthly mortgage payments, but you can also expect to
pay the lender the typical closing costs associated with
any mortgage loan.
Why? Because from the lender's standpoint, a
refinanced loan is no different than any other mortgage
loan. So be prepared for service fees or points and
other expenses including a new charge for title
insurance.
Title Insurance is Important When
RefinancingWhy do you need to buy title
insurance again even though you purchased a policy when
you first bought your home and there is no change in
ownership?
It's because a separate policy is needed by the
lender insuring the validity of your mortgage when it is
made.
For as long as you own the property your mortgage is
valid, but it doesn't insure the new mortgage created
when you refinance, and it doesn't provide protection
against events that may have transpired between the time
you purchased the property and when it is refinanced.
For example, you may have taken out a second mortgage
on the home that could threaten the priority of the new
lender's mortgage. Or, there could be legal judgments
against you or a mechanic's lien against the property by
a supplier who wasn't paid for home improvements.
Lenders also insist on a new title policy because
many mortgages are packaged as securities and sold to
investors in the secondary mortgage market. Title
insurance is the only practical way to provide the
assurance investors demand and to ensure that the
mortgages backing these securities are valid and
enforceable.
For your refinance transaction with Mizner Title & Escrow, you may qualify for a
special title insurance rate based on the loan amount.
There may be additional charges for recording fees,
closing fees and endorsements. Your lender can provide
you with an estimate of these costs.
How to Prepare for Your Refinance
ClosingOnce you have made the decision to
refinance your home, you'll want your transaction to
progress as smoothly and efficiently as possible. In an
effort to avoid potential problems and delays, consider
the following points. Check with your agent
to determine which ones apply to you.
- Bring a Cashier's or Certified check to the
closing for the amounts you must pay, not a personal
check.
- Bring an original Homeowners Insurance Policy to
the closing, along with a paid receipt for the first
year's premium. If you're refinancing a condo, bring a
Certificate of Insurance instead. A Certificate of
Insurance can be obtained from your condo association
or property management company.
- Before the closing, contact your lender regarding
any additional requirements that must be satisfied
PRIOR to closing.
- Bring personal identification that includes your
picture and signature to the closing.
- If you have an existing mortgage(s), a current pay
off letter(s) must be presented at closing. Contact
your lender for instructions on how to obtain a
current pay off statement(s).
- If you are going to be paying off credit card
balances at the closing, the most current statements
must be brought to the closing.
- If your property is a condo, bring an assessment
letter from your condo association or property
management company to the closing.
- If your transaction requires a Notice of Right to
Cancel, disbursement may be delayed until the fourth
day following the day of the closing.
MIZNER TITLE & ESCROW, INC.
CATHARINA B. VAN KLEECK, President
MICHELLE A. LYNCH, Vice President
Mizner Park
433 Plaza Real, Suite 275
Boca Raton, FL 33432
(561) 997-8600, Fax (561) 258-0550
E-Mail -
miznertitle@bellsouth.net
(Directions to Mizner Title from Local Airports)
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