Do you always have to pay for title insurance on a refi?

[cardude]

I've never done a refi, and when poking around on the PenFed site I noticed that the title insurance estimate was $3700. I just bought my house 3 months ago and just paid for title insurance at closing, and I was wondering if there was a way to get around paying it again.

I've got a 6.5% rate now and am trying to get a 5.5% fixed for 20 years with no points.

Anyone done a refi with PenFed?

[Martha]

No refi with Penfed, but you can get a lower reissue rate for the title insurance if you use the same title company. That may not be in your control. The insurance is an insurance policy that runs in favor of the lender, so if you are not using the same lender, the new lender will need its own title insurance.

[cardude]

Quote:

No refi with Penfed, but you can get a lower reissue rate for the title insurance if you use the same title company. That may not be in your control. The insurance is an insurance policy that runs in favor of the lender, so if you are not using the same lender, the new lender will need its own title insurance.

Ahhh, good point. Thanks Martha.

So what about telling my current lender what I'm thinking about with PenFed? Think they would try to match it? Anyone had any success with that?

[Spanky]

If your home was purchased within the last few years, you may be entitled to a lender's title policy discount.

[Walt34]

Quote:

Originally Posted by cardude I've never done a refi, and when poking around on the PenFed site I noticed that the title insurance estimate was $3700. I just bought my house 3 months ago and just paid for title insurance at closing, and I was wondering if there was a way to get around paying it again.

Generally yes, you're going to have to pay for a title search and title insurance. The reason is that the lender wants to make sure you haven't:

A. Sold the house to someone else in the meantime but not recorded the sale.
B. Refinanced with someone else yesterday and that refi is not recorded yet.

Either event leaves the lender holding a very empty bag, so it's a CYA thing for the lender. They try to not make the same mistakes twice.

[mathjak107]

the title insurance is only up to the last time a search was done. and covers backward in time . a lender wants to know if there were any liens filed on you since then as they have to take new risk for a new time frame. the old money the bank gave you was covered under the tiltle insurance from that point backward. the new money needs to have title insurance that they give you . what a racket ..... but non the less title insurance only covers what can be seen in the rear view mirror.

[Texas Proud]

I would check it out... my BIL did a refi within a year and the company accepted the policy with just an update which was very cheap...

Don't get hosed on this....

[DJRR]

As others have stated, you do not need to repurchase title insurance for yourself because you already have it and the new lender can get a reissue of the title insurance for much less money. There is really no way out of that if you want a mortgage. Websites quote their estimate of full blown insurance because that is what is used for Truth in Lending disclosures.

[mathjak107]

well yes you have insurance it but no you dont have it. the lender is only covered from the date the origional policy was issued backward in time. if its 10 years later and a lender loans you money their is no coverage for the lender for the last 10 years on that existing policy . title insurance only protects what happened in time from the date the policy is issued, no events forward in time are covered. if a lawsuit levied a lien recently and someone else is now the first lien holder the bank can be out of luck without a new policy covering the past 10 years and a new search done. while yes you may get a discount on a new policy the lender definetly needs a new policy.

[cardude]

Cool, thanks for all the info. I'm still working on it. I am able to get a 40% discount on the new title policy, but they are still requiring a new policy to be issued.

One refi proposal was strange I thought. The refi is considered a jumbo since it is over $417K this lender said, so they proposed doing a 2nd to cover the difference. Does that sound right? The rate on the 1st was 5.5% fixed for 20 which sounded OK (I'm at 6.5% now), but the rate on the 2nd (about 80K) would be 7.25% for 15 years, which is too high. The whole deal sounded way too complicated to me..............

Thoughts?