mortgage refi question....

[LansdaleHokie]

can someone explain to me why i am required to pay title insurance if I refinance with my current lender and remain with the same title insurance company? Is this nothing more than a shakedown? What i'm asking is........is there a legitimate reason for why this requirement exists, other than "IIWII"?

[vt43]

is there a legitimate reason for why this requirement exists

No. They're just trying to squeeze a few extra $ (or a lot really) out of you.

You can ask this to your mortgage specialist but in reality nothing they will do about it

[Hokie Flyer]

I always thought it was silly to provide title insurance for a refi....but I believe that it is necessary because the previous title insurance protects the loan up to the time of the previous refi. Even though the property may not have changed hands, there could have been liens from contractors etc placed against the property. So the new title insurance protects from any liens that may have been placed against the property that are not disclosed between the last refi and now.

That is my guess anyway.

[erikl2]

There are plenty of legitimate reasons to obtain title insurance, but the likely reason that your current lender is demanding it on a refinance is so that they can sell your loan through the secondary mortgage market. You should be able to benefit from your lender taking advantage of the secondary market by receiving a slightly lower mortgage rate.

[VT48uva0]

I used to own a title company. Title insurance is not like auto, life etc. It insures the history of the property up to a certain time. You have to update that search in order to find out if you have any liens etc that need to be released (judgments,old deeds of trust to maintain lien status etc.) and to sell the loan in secondary market. They should give you a greatly reduced price on the insurance as all you need is an update from the last title insurance date. Make sure they have your old title insurance docs.

[LansdaleHokie]

okay then - my "original" mortgage was written in June of 2010. I'm considering a a refi now. Does it seem kosher that the estimate shows a title insurance item for $2,700 for a mortgage of $320k?

[Hokies23]

I think that is the standard first time fee...do you have your docs from 2010? I would be that is close to the fee from then...discuss w/ your mortgage company that you want the same title co. and an extension of the previous policy. that should bring it down to around $500

[VT48uva0]

Wow- that is way high. Only thing I can think of is they are charging you lenders and owners title insurance and still that is over the top. Go back to your original title insurance provider and ask for a quote for an update. It should be a lot less than what you were quoted. If I can help email me at hokiehibkc@verizon.net - having a little bit of trouble figuring out the new design