Unless you paid cash for your home, then you most certainly were required by your lender to purchase a lender’s title insurance policy when you bought your home. If you refinance that home, your lender will again require you to buy a new lender’s title policy.
There are a few reasons for this. Each time you re-finance, the lender needs to know that they will be in first place lien position in the event the mortgage payments stop getting paid and there is a foreclosure. Also, once you refinance your home the old loan is paid off and therefore the title policy expires. So when you refinance (ie: take out a new loan), your lender will most certainly require a new loan policy on your new mortgage to protect their investment in the property.
Your original policy is valid for as long as you own the property, but does not insure the new mortgage created for you when you refinance, and it also doesn’t provide protection against events that may have transpired between the original purchase and this refinance (ie: liens that may have been placed against the property).
Just as we as consumers are always looking for ways to protect our interests, understandably so is your lender.
If you or your clients have any questions about title insurance – whether it’s in regards to a refi or not – Cumberland Title is always happy to help you understand the process better by answering any questions you have.