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Today's lower interest rates have spurred you to refinance
your mortgage. Now you can expect to reap the benefits
of substantially reduced monthly mortgage payments, but
you can also expect to pay the lender the typical closing
costs associated with any mortgage loan.
Why? Because from the lender's standpoint, a refinanced
loan is no different than any other mortgage loan. So
be prepared for service fees or points and other expenses
including a new charge for title insurance.
Title Insurance is Important When Refinancing
Why do you need to buy title insurance again even though
you purchased a policy when you first bought your home
and there is no change in ownership?
It's because a separate policy is needed by the lender
insuring the validity of your mortgage when it is made.
For as long as you own the property your mortgage is valid,
but it doesn't insure the new mortgage created when you
refinance, and it doesn't provide protection against events
that may have transpired between the time you purchased
the property and when it is refinanced.
For example, you may have taken out a second mortgage
on the home that could threaten the priority of the new
lender's mortgage. Or, there could be legal judgments against
you or a mechanic's lien against the property by a supplier
who wasn't paid for home improvements.
Lenders also insist on a new title policy because many
mortgages are packaged as securities and sold to investors
in the secondary mortgage market. Title insurance is the
only practical way to provide the assurance investors demand
and to ensure that the mortgages backing these securities
are valid and enforceable.
For your refinance transaction with the Chicago Title
and Trust Family of Companies, you may qualify for a special
title insurance rate based on the loan amount. There may
be additional charges for recording fees, closing fees
and endorsements. Your lender can provide you with an estimate
of these costs.
How to Prepare for Your Refinance Closing
Once you have made the decision to refinance your home,
you'll want your transaction to progress as smoothly
and efficiently as possible. In an effort to avoid potential
problems and delays, consider the following points. Check
with your real estate agent to determine which ones apply
to you.
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Bring a Cashier's or Certified check to the closing
for the amounts you must pay, not a personal
check.
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Bring an original Homeowners Insurance
Policy to the closing, along with a paid receipt for
the first year's premium.
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If you're refinancing a condo, bring a Certificate
of Insurance instead. A Certificate of Insurance
can be obtained from
your condo association or property management
company.
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Before the closing, contact your lender regarding
any additional requirements that must be satisfied
PRIOR to closing.
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Bring personal identification
that includes your picture and signature to the closing.
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If you have an existing mortgage(s), a current pay
off letter(s) must be presented at closing.
Contact your lender
for instructions on how to obtain a current
pay off statement(s).
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If you are going
to be paying off credit card balances at the closing,
the most
current statements
must be brought
to the closing.
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If your property is a
condo, bring an assessment letter from your condo association
or property
management company
to the closing.
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If your transaction
requires a Notice of Right to Cancel, disbursement
may be delayed
until
the fourth day following
the day of the closing.
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Copyright © 2003 Chicago Title Insurance Company.
All Rights Reserved.
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