Refinance

A refinance closing usually replaces an existing mortgage or Deed of Trust with a new one. The process involves the same legal and financial scrutiny as a purchase but only involves the owner, lender, and title company.

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The refinance process usually has many steps that occur prior to Assurance Title becoming involved. Once our services are requested the following usually takes place:

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1. Property & Title Clearance

 

• Title Search: We conduct a title search to identify and ensure the property's title's status (e.g., judgments, liens, tax liens, and Deeds of Trust) that are filed against the owner and/or property.

• Payoff Statement: We secure required payoff statements from the current mortgage holder and any judgment holders, detailing the exact amounts required to close and zero out any loans or liens.

• Title Commitments: A title commitment is issued detailing the requirements that must be met in order for the new loan to be insured.

 

 

2. Closing Disclosure & Right of Rescission

 

• Closing Disclosure (CD): The borrower receives the final Closing Disclosure at least three business days before the closing date. This document legally binds the final terms and costs and must be reviewed against the initial Loan Estimate.

• The Closing: The borrower(s) meet with the us to conduct the act of refinance where they sign the final loan documents, including the new Promissory Note and the new Deed of Trust.

• Closing Costs: The borrower either pays the final closing costs (fees for title work, appraisal, attorney, etc.) or rolls them into the new loan principal.

 

 

3. Funding & Recording 

 

• Right of Rescission: With a refinance of a primary residence (excluding a purchase or investment property), federal law mandates a three-business-day Right of Rescission (or cancellation period) following the signing. The loan funds cannot be disbursed until this period expires and the owner can cancel the new loan during this period.

• Funding: After the rescission period ends, the new loan is officially funded. The new loan proceeds are used to immediately pay off any existing mortgages and liens. In a cash-out refinance, any surplus cash is disbursed to the borrower.

• Recording: The new Mortgage/Deed of Trust is recorded with the local county office, officially replacing the old loan document.

• Title Insurance: A new Lender's Title Insurance policy is issued to protect the new lender's investment.