is a title needed when refinancing mortgage? Why is fee so large?
by Mortgage Rates on Thursday, December 2nd, 2010 | 5 Comments
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They need to be sure you haven’t sold or mortgaged the house to anyone else.
You can’t avoid a title search. They need to know if you have taken out other loans, etc.
That is to ensure there are NO liens or outstanding HELOCs on the property
Depending on where you live, the fees could be more or less than what I will state.
First of all, you will have to pay title insurance. This is an insurance policy that insures the lender on the title of the property. The lender wants to protect themselves against someone else making a claim that they own the property. This fee is based on the loan amount. The larger the loan, the bigger the insurance policy to cover it.
You will also pay a recording fee to record the new trust deed/mortgage with the county. This is a flat fee.
There will be a closing fee that the title company/attorney will charge for preparing the paperwork and the research associated with closing the transaction. This fee varies from one company to the next, but it usually is a set fee.
Also, there are usually endorsements to the title policy. This will vary slightly depending on the type of property you own. For example, there are additional endorsements that are needed on a condo than there are on a single family home. This is also a set fee.
As far as title fees are concerned, this should cover it all on a refinance loan.
They are trying to protect you and also their resources.