Why do I need to purchase a new title insurance policy on a refinanced loan?
If you are thinking about refinancing your home to get a lower interest rate, pay off debts, or for improvements, a title company plays an essential part in this process.
To the lender, a refinanced loan on your home is considered a new loan. So, your lender needs to ensure that their new loan is protected by title insurance, just as the original lender required.
Therefore, when you refinance you are buying a title policy to protect your lender against title related defects.