5837609-family-silhouette-and-new-home-conceptWhen an owner decides to refinance their residential mortgage loan, they must undergo a similar underwriting process as when the loan was first issued. The lender will need to see reasonable proof that the owner will be able to repay the new loan. Refinancing is an ideal way for many homeowners to reduce their interest rates or change loan types. For example, an owner may want to switch to a fixed rate loan from their current adjustable one. A refinance can often be done through the bank that currently holds the mortgage or through a new mortgage company.

When refinancing, the borrower does not have to purchase a new Owner’s Title Policy since it is a one time charge for as long as you or your estate owns the home and even covers after a sale. However, the lender, even if it’s the same lender as on the previous loan, will require the borrower to purchase a new Lender’s Title Insurance Policy. The Lender’s Title Insurance Policy can be purchased at a discounted rate. In the past, to receive this discount, the owner would have to provide a copy of the prior Owner’s Title Policy, but today, every borrower closing with FGTE is given the reissue discount on their new Lender’s Policy. This makes refinancing more affordable for every borrower. Borrowers should keep in mind that if they did not buy an Owner’s Title Insurance Policy when they purchased the home, they are able to do so at the time of refinance or at any time. Just give us a call to learn more about the cost of a refinance and/or the option of buying an Owner’s Policy after your purchase closing.