Refinancing raises a fair question: you already bought title insurance, so why are you being asked to buy it again? The answer is that a refinance needs only one of the two policies, and you may even get a discount. Let me clear it up.
Written by Anthony I. Shin, Esq., Principal and real estate attorney at Prime Title & Escrow
When you refinance, you are replacing your old loan with a new one. That single fact explains what title insurance a refinance does and does not require, and where you can save. Here is the whole picture.
A refinance requires a new lender’s policy, because the old loan is paid off and the new lender needs its own coverage. It does not require a new owner’s policy, since the one you bought at purchase still protects your equity. You may also qualify for a reissue credit on the new lender’s policy.
The lender’s policy is tied to the loan
A lender’s policy protects a specific loan. When you refinance, that loan is paid off and replaced, so the policy that protected it ends with it. The new lender requires its own policy to protect the new loan’s lien position, which is why a refinance involves a fresh lender’s policy even though nothing about your ownership has changed. I explain the two policy types in owner’s versus lender’s title insurance.
Your owner’s policy stays in force
Here is the reassuring part. The owner’s policy you purchased when you bought the home does not expire and does not need to be repurchased. It protects your equity for as long as you or your heirs own the property, refinance or not. So a refinance asks you to insure the new loan, not to re buy protection for yourself.
A fresh search still matters
A refinance still includes a title search, and that is a feature, not a formality. It confirms that nothing has attached to your property since you bought, such as a contractor’s lien, a tax lien, or a judgment. Catching and clearing those protects both you and the new lender before the new loan records.
Because you are buying only the lender’s policy, a refinance is often less expensive than the title insurance at purchase, and a reissue credit can lower it further. If you bought an owner’s policy originally, you may qualify for that discount on the new lender’s policy. I explain it in the reissue rate, and I check it on every refinance I handle.
The rest of a refinance closing
A refinance has other costs too, including the recordation tax on the new deed of trust, though Virginia gives a reduced rate on the portion of the loan that was already taxed. I cover that in the Virginia recordation tax. For the full set of charges, see closing costs in Virginia.
Timing can affect the savings. If you refinance not long after buying, less is likely to have attached to the title, and a reissue credit on the new lender’s policy can make the title cost noticeably lighter than it was at purchase. The longer you wait, the more a fresh search matters, but the owner’s policy you already hold keeps protecting you throughout. Either way, you are not repurchasing protection for yourself, only insuring the new loan.
It is also worth knowing that a rise in your home’s value does not force you to buy a new owner’s policy. Your original policy continues at its written amount. If you want coverage that grows with value over time, that is a feature of the enhanced owner’s policy I describe in enhanced versus standard owner’s title policy, which is chosen at purchase rather than at refinance.
These refinance principles apply across Virginia and West Virginia. The structure is the same: a new lender’s policy, your existing owner’s policy intact, a fresh search, and a possible reissue credit. I am glad to prepare a clear refinance estimate so you know what to expect.
Send me your loan details and I will prepare a refinance title estimate and check whether a reissue credit applies.
Get Your Free Quoteor call (703) 552-4155Frequently asked questions
Do I need title insurance when I refinance in Virginia?
Your lender will require a new lender’s policy when you refinance, because the old loan is paid off and replaced with a new one. The owner’s policy you bought when you purchased the home stays in force and does not need to be repurchased.
Do I need a new owner’s policy when I refinance?
No. An owner’s policy lasts as long as you or your heirs own the property, so a refinance does not require a new one. The new policy a refinance requires is the lender’s policy for the new loan.
Can I get a discount on title insurance when I refinance?
Often yes. If you bought an owner’s policy when you purchased the home, you may qualify for a reissue credit on the new lender’s policy. Ask your settlement agent to check, since it can lower your refinance closing costs.
Why does a refinance need a new lender’s policy at all?
Because the lender’s policy is tied to a specific loan. When you refinance, that loan is replaced, so the new lender requires its own policy to protect the new loan’s lien position. A title search also confirms nothing has attached to the property since you bought.
Is title insurance on a refinance cheaper than on a purchase?
It can be, because there is no owner’s policy to buy and you may qualify for a reissue credit on the lender’s policy. The exact figure depends on your loan amount and insurer, so ask for a refinance quote.
This article is general information about title insurance on a refinance in Virginia and West Virginia. It is not legal or financial advice for your specific transaction, and figures vary by loan amount, insurer, and locality. Please confirm the details that apply to your refinance with me directly.