Do You Need To Buy Another Title Insurance Policy After Refinancing?

02/04/2025 07:10 AM Mark Goodman

Refinancing your commercial mortgage can end up saving you tens of thousands of dollars over the course of your loan, so it’s a move that many investors make when the market is right. There will be some expenses associated with refinancing, with closing costs being the biggest one, but it still may make financial sense to refinance your loan for individual reasons. One other expense that you may incur when refinancing your loan is when it comes to your title insurance policy. In today’s blog, we explain why you may have to buy another title insurance policy if you refinance your loan.

Refinancing And Title Insurance

As we’ve mentioned on the blog in the past, title insurance is a one-time purchase that protects interested parties in the event that a previously undiscovered issue arises with a property. There is a lender’s title insurance policy that protects the bank or financial institution that is providing the loan to fund your purchase, and there is buyer’s title insurance that protects your financial interests as the property owner.

Let’s start with the good news. If you previously purchased an owner’s title insurance policy, that one-time premium will likely continue to cover you after you refinance. However, you will likely need to purchase another lender’s title insurance policy. That’s because a lender’s title insurance policy is based on your mortgage amount, meaning that as you pay off your loan, the coverage value decreases.

This is a relatively modest one-time expense, and it really shouldn’t have much of an impact on whether or not it makes fiscal sense to refinance your loan, but at the same time, it’s an expense you’ll want to expect as part of the refinancing process.

If you need help securing lender’s or buyer’s title insurance as part of an original purchase or when refinancing, reach out to the team at Commercial Partners today at (612) 337-2470.