The Quick Read: Usually yes for the lender, generally no for you. A cash-out refinance is a brand-new loan, so the new lender will typically require its own lender’s title policy. The owner’s policy you bought at purchase stays in force, and you generally don’t need to buy another. A narrow Fannie Mae pilot can waive the lender’s policy on certain refinances, but it is limited by loan type, leverage, and geography.
Which Title Policy Does What?
Two different policies get called “title insurance,” and mixing them up causes most of the confusion. Here is the side-by-side.
| Policy | Who it protects | After a cash-out refinance |
|---|---|---|
| Owner’s policy (from purchase) | You | Stays in force, no new one required |
| Old lender’s policy | Your previous lender | Ends when the old loan is paid off |
| New lender’s policy | Your new lender | Generally required for the new loan |
The CFPB describes the lender’s policy as protection for the lender against title problems, usually required to get a mortgage. It also says plainly that the lender’s policy does not protect your equity in the home. That surprises a lot of homeowners. You pay for the policy, and it covers the other party.
Why Does a Cash-Out Refinance Need a New Lender’s Policy?
Refinancing doesn’t modify your old mortgage. It pays it off and creates a new one. The old lender’s policy was tied to the old loan, so it ends with that loan. The new lender was never covered by the earlier title search.
Lenders care about what could have happened since you bought. Think of a second loan, a contractor’s lien, a judgment, a recording error, or an old claim that surfaces. The new lender wants a policy that insures its lien position against those problems.
Staying with your current lender doesn’t change this. A refinance is still a new loan with a new lien, and the new policy follows the new loan.
Investor rules push in the same direction. Each loan Fannie Mae purchases must carry a title insurance policy or an attorney title opinion letter that meets its requirements. That is a rule on the lender who sells the loan, not on you. Across the wholesale programs Lendmire works with, the new lender’s policy is a standard part of a cash-out file.
Does Cash-Out Change Anything About Title?
The baseline requirement is the same as on a refinance. The label “cash-out” doesn’t flip a switch on title insurance. What cash-out changes is size and scrutiny.
- Policy size. The lender’s policy is generally based on the new loan amount. Pull out more equity and the loan grows, so the policy amount grows with it.
- Lien payoffs. A cash-out file often pays off existing liens at closing. The lender’s policy must show that any other liens are subordinate to its own, and title insurance doesn’t excuse the requirement that no liens sit ahead of the new loan.
- Junior liens. A HELOC or second mortgage has to be paid off or handled properly, since the new lender needs its position clear.
- Leverage and seasoning. For conventional cash-out, the limit is 80% LTV on a one-unit primary residence and 75% on two- to four-unit homes and second homes. The loan being paid off generally must be at least 12 months old, and a borrower must have been on title for 6 months, with exceptions for delayed financing, inheritance, and legal awards. These are program rules, subject to lender guidelines and full file review.
Those leverage rules shape how much cash you can take. They don’t change which title policies you need.
Does Your Owner’s Policy Still Protect You?
Yes, in most cases. An owner’s policy generally has no expiration date and is a one-time premium paid at purchase. It keeps protecting you as long as you or your heirs hold the property. The CFPB’s owner’s title insurance page treats owner’s coverage as something you may want, not something the lender requires.
When might you think about more owner’s coverage? A few situations come up:
1. Major renovation. If the cash-out pays for work that raises the home’s value a lot, your old coverage amount may lag behind. Ask a title professional whether an updated policy makes sense.
2. Adding or removing a name. Changes to who is on title can raise their own questions about coverage.
3. No policy at all. If you inherited the home, skipped an owner’s policy at purchase, or can’t find it, you have no owner’s protection to carry forward. A new one is optional, but worth asking about.
If none of those fit, leaving the old policy alone is the normal path.
What Does the Title Search Check, and What If It Finds a Problem?
The title company searches public records and issues a commitment describing what it will insure. A lender such as one selling to Freddie Mac must have that commitment in the loan file, per Freddie Mac’s Guide.
In practice, it goes like this:
1. The title company searches the record for liens, judgments, easements, and ownership issues.
2. It issues a commitment listing what must be cleared.
3. Payoffs, releases, or corrections are handled before closing.
4. The lender’s policy is issued at closing for the new loan amount.
A defect such as an unpaid lien, a forged deed, or a missing heir can delay or stop a closing until it is cleared. That’s the reason a cash-out lender wants the search done on every file, even for homes you’ve owned for years. Long ownership doesn’t erase old filings.
Can the Lender’s Policy Be Skipped?
Sometimes, in narrow cases. Don’t plan around it.
The Fannie Mae pilot. Under Fannie Mae’s title acceptance pilot, certain refinances judged to be low title risk may be sold without a lender’s policy or attorney opinion letter. The pilot is listed as active, with a stated scope that runs into late next year. Per the FHFA’s pilot FAQs, eligible loans are certain refinances below 80% LTV, with participating lenders in select geographies. The lender must warrant a valid first lien, and the property must be free of prior liens.
Here is the catch for cash-out borrowers. Whether cash-out loans qualify under the pilot is not clearly established. Treat eligibility as lender- and file-dependent. Reports that Fannie Mae is working to expand the pilot exist, but availability isn’t something to count on.
One more point worth holding onto. The FHFA has said the pilot affects only the lender’s title requirement. It doesn’t change your own title risk.
Attorney opinion letters. Fannie Mae and Freddie Mac accept an attorney opinion letter in place of a policy only in limited circumstances, with conditions set out in Freddie Mac’s servicing guide. That is a lender-side choice, not something a borrower requests.
Do FHA, VA, and Conventional Loans Handle This Differently?
Mostly the same on title. For FHA, the lender’s own requirements and investor overlays decide the title-insurance question on a cash-out loan. For VA, the lender may apply its own title insurance requirements, with VA requiring only that title meet its standards, as ALTA’s summary of the VA handbook explains.
The streamlines are a different product. A VA IRRRL generally skips the appraisal and underwriting, and an FHA Streamline limits credit review. Skipping an appraisal is not the same as skipping title work. A cash-out on either program is a full-file loan with an appraisal.
A few special cases carry added title requirements. Condo and PUD units need extra endorsements under Fannie Mae’s rules, and Texas home-equity loans need a policy with specific endorsements. Texas is the named exception, and it also caps homestead cash-out under the state constitution.
Who Pays, and How Does It Show Up?
In a refinance, the homeowner typically pays for the lender’s policy. It appears on your Loan Estimate and Closing Disclosure, under services you can’t shop for or services you can shop for, depending on whether the lender lets you choose.
Some practical notes:
- It’s a one-time closing cost, not a monthly charge. It affects cash to close, or the balance if costs are rolled in, and through that the payment.
- You can often shop. The CFPB says you can usually shop for title insurance separately from your mortgage, and that using one provider for both policies is usually cheaper. That discount mostly matters at purchase.
- Ask about reissue rates. Some states and insurers discount refinance premiums when a prior policy exists. Rules vary by state, so ask your title company directly.
- Invoices can differ from estimates. The CFPB notes that an itemized settlement-agent list can look different from your Loan Estimate without meaning you were overcharged.
Pricing varies by state and insurer, and there is no official national figure, so compare the title lines on your own estimate.
A Hypothetical Before-and-After
Picture a homeowner who bought a primary residence several years ago with an owner’s policy and a lender’s policy. The first loan is paid off through a cash-out refinance at the program’s leverage limit.
- Before: the owner’s policy covers the homeowner. The old lender’s policy covers the old lender.
- At payoff: the old lender’s policy ends with the old loan.
- After: the new lender holds a new lender’s policy sized to the new, larger loan. The original owner’s policy still covers the homeowner.
Nothing about the owner’s protection changed. The only new coverage protects the new lender.
Key Terms Defined
Owner’s title insurance: A one-time policy that protects you against covered title defects for as long as you hold the property.
Lender’s title insurance: A policy that protects the lender’s lien on the home and generally ends when the loan is paid off.
Title commitment: The title company’s written promise to insure, listing what must be cleared before closing.
Reissue rate: A discounted premium some insurers offer when a prior policy exists on the property.
Attorney opinion letter: A lawyer’s written opinion on title that some investors accept in limited cases instead of a policy.
Frequently Asked Questions
Can I skip the lender’s title policy on a cash-out refinance?
Generally not. The new lender will typically require it. A Fannie Mae pilot can waive it for certain low-risk refinances in select areas, but cash-out eligibility is unclear and depends on the lender and file.
Do I need it if I refinance with my current lender?
Yes, usually. A refinance is a new loan with a new lien, so the policy follows the new loan even when the lender is the same.
Will my homeowner’s policy be replaced?
No. Your owner’s policy continues. Don’t confuse it with homeowners insurance, which covers physical damage to the house and is a separate product.
Does a cash-out refinance cost more in title charges?
It can, because the lender’s policy is generally sized to the new loan amount. A larger balance means a larger policy. Compare the title lines on your Loan Estimate.
Is a new lender’s policy the same as getting a new deed?
No. A new policy is insurance for the new lender. It doesn’t change who owns the property or require a new deed.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches. The cash-out refinance programs page lays out the options.
Whatever the pilot does next, the safest planning assumption is a lender’s policy on the new loan and your original owner’s policy standing untouched.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Lendmire arranges FHA, VA, conventional and jumbo purchase and refinance loans through wholesale lenders; every file is underwritten by the lender under the applicable program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB – What is lender’s title insurance?
2. Fannie Mae Selling Guide B7-2-01
3. CFPB – What is owner’s title insurance?
5. Fannie Mae Pilot Transparency
6. FHFA – Title Acceptance Pilot FAQs
7. Freddie Mac’s servicing guide
8. ALTA’s summary of the VA handbook
This article is part of Lendmire’s Refinance series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: How to Apply for a Cash-Out Refinance on a Texas Homestead · How to Take Sole Title From an Ex-Partner With a Cash-Out Refinance · Cash-Out Refinance Title Rules for a Divorce Buyout of the Home
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.