Documents for Purchasing or Refinancing
When is Title Insurance or a New Deed Necessary?
When it comes to purchasing vs. refinancing property, there are some difference that affect the need for title insurance and whether or not a new deed will be necessary.
To start, a purchase loan is obtained when borrowing money from a mortgage lender, so that you can buy a home or commercial property.
A refinance loan is taken out when you already own a piece of property with a mortgage and would like to refinance your existing loan into a new loan.Property Purchases
The typical Real Estate transaction requires a new deed, assigning the ownership of the property after that transaction. A settlement company works with you to provide title insurance, a title exam, and to close the transaction in a timely and correct manner.
Upon closing, the deed is delivered to the buyer and recorded in the appropriate County courthouse.Property Refinancing
When refinancing a property, many of the same steps happen as in a typical real estate transaction.
When refinancing, no new Deed is necessary unless required by the lender. Another significant difference is with Title Insurance. Since the refinancing lender needs to protect their interest in the real estate, a Lender’s Title Insurance Policy is required. An Owner’s Title Insurance Policy is not required when refinancing a property.
To learn more about the two kinds of insurance, visit our Title Insurance page