The Quick Read: Usually, yes. A cash-out refinance creates a new loan and a new lien, so the lender almost always requires a new lender’s title policy, and you typically pay for it at closing. That policy protects the lender, not you. A narrow pilot program waives it on some refinances, but it is not the general rule.
Why Does a Cash-Out Refinance Need a New Title Policy?
Because a refinance is not a tweak to your old mortgage. It is a brand-new loan. The new loan pays off the old one, and a new lien gets recorded against your home.
The policy you or a previous lender bought years ago belonged to the old loan. When that loan is paid off, the need for that policy ends. Think of it like car insurance on a car you sold. The new loan starts with a blank slate.
Staying with the same lender doesn’t change this. A new note and a new lien still need fresh coverage.
Across the wholesale programs a broker places files with, this requirement shows up on essentially every cash-out refinance program. A conventional cash-out on a one-unit primary home generally tops out at 80% loan-to-value (LTV). That is the loan amount as a share of the home’s value. Title coverage is part of how a lender protects that stake. Lenders also resell many loans to investors, and those investors expect the title work to be in the file.
Two Policies, Side by Side
People mix these up constantly. There are two different products, and only one is nearly always required.
| Factor | Lender’s Policy | Owner’s Policy |
|---|---|---|
| Who it protects | The lender | You |
| Required on a refinance? | Almost always | Usually optional |
| What it covers | The lender’s loan amount | Your ownership and equity |
| How long it lasts | Until the loan is paid off | As long as you own the home |
| Who typically pays | You, at closing | You, if you buy one |
The takeaway is simple. The charge you see on a cash-out refinance is for the lender’s policy. It doesn’t protect your equity, even though you pay for it.
Does Taking Cash Out Change Anything About Title Insurance?
Not in the rules. Title insurance isn’t a cash-out-specific requirement. It applies to the loan whatever the purpose. A refinance needs it. So does a cash-out.
What cash-out changes is the size and shape of the loan. Three things are worth knowing.
The loan is larger. You are borrowing against equity, so the new balance is higher than the old one. The lender’s coverage follows the new loan amount. Title premiums are based on the amount insured, so a larger loan generally means a larger premium.
A paid-off home still needs coverage. Say you own your home free and clear. A cash-out on that home puts the first lien on it for the first time. A lender’s policy is still generally required for that new lien.
Other liens get sorted out. The title search looks at everything recorded against the property. Second mortgages, judgments, and unpaid tax liens have to be paid off or properly handled. If something is paid from your proceeds, it reduces the cash you walk away with.
Leverage and seasoning matter too, though they don’t decide the title question. On a conventional cash-out, the first mortgage being paid off generally must be at least 12 months old. Occupancy changes the leverage cap as well. A one-unit primary home can reach 80% LTV. Two- to four-unit homes, second homes, and investment properties top out at 75%. Those limits are subject to lender guidelines and full file review.
What Happens to the Owner’s Policy You Already Have?
Usually nothing, and that is good news. An owner’s policy is tied to you and your ownership, not to a particular loan. A refinance doesn’t automatically cancel it, and you generally don’t need a new one. Confirm this with your title company, since practice can vary by state.
What if you never bought an owner’s policy? That is common with inherited homes, gifted homes, and older purchases. A cash-out refinance doesn’t require you to buy one. The lender’s policy still gets issued for the lender.
Buying an owner’s policy now is your call. Its job is to protect your equity if an old title defect surfaces. The consumer agency that oversees mortgage disclosures notes that owner’s coverage is something you may want, not a requirement. If you do buy both policies, the total is usually lower with the same provider.
Some situations deserve a conversation with your title agent:
- You added or removed a spouse or co-owner from title.
- The home moved into or out of a trust.
- You inherited the home and the paperwork is thin.
The Exception: Title Waiver Pilots
There is one real exception, and it is narrow. Fannie Mae runs a Title Acceptance pilot that lists a multi-year term and an active status. Under it, certain low-risk refinances may be sold to Fannie Mae without a lender’s title policy.
The limits matter. According to the FHFA’s pilot FAQs, the program covers certain refinances at lower leverage, offered by participating lenders in select geographies. The lender is still warranting a valid first lien. That promise doesn’t go away.
Here is the part that trips people up. The published materials describe “certain refinance loans.” They don’t clearly say cash-out refinances qualify. Don’t assume yours does. Trade press has reported the pilot may expand, but no new terms should be taken as settled.
Two more points. First, the pilot affects the lender’s policy only. Your owner’s coverage is a separate matter. Second, it depends on the lender participating. Many lenders don’t. So the safe planning assumption is still that you will pay for a lender’s policy.
Some loans use an attorney opinion letter instead of a policy. That is accepted in specific cases and in certain areas. It is a substitute for the policy, not an exemption from title work.
What About FHA Streamline and VA IRRRL Loans?
These are refinances of an existing government-backed loan. They relax the appraisal and credit review. They aren’t cash-out products, so they are a different path from this article’s topic. The FHA Streamline and VA IRRRL are built for rate-and-term changes on existing FHA and VA loans.
Relaxed underwriting doesn’t automatically mean relaxed title steps. Whether a lender’s title policy is required depends on program rules and the lender. Ask before you assume.
Where the Charge Shows Up on Your Paperwork
Title charges are disclosed up front. On the Loan Estimate, you will see the lender’s policy premium listed among the closing costs. It appears again on the Closing Disclosure. The federal consumer agency’s factsheet on lender’s title insurance describes the lender’s policy as generally required by the creditor, while the owner’s policy is typically optional.
You can usually shop for the title provider. The agency’s owner’s title insurance page says you can generally choose a title company separately from your mortgage. Whether a particular line is shoppable depends on how the Loan Estimate lists it. Ask your loan officer which title services are on the list you can shop.
Paying for it is flexible. You can cover closing costs in cash. Within limits, they can also be built into the new loan. The Fannie Mae cash-out guidelines allow the new loan amount to include closing costs, points, and prepaid items on a cash-out refinance. Individual lenders may set their own limits.
Financing the cost isn’t free, though. It enlarges your balance. That raises your payment and the interest you pay over time, and it trims your net cash.
How Title Problems Can Eat Into Your Cash
Title work is not just a fee. It is also a search, and the search can find things.
Common surprises include:
- An old mortgage or home equity line that was paid off but never formally released.
- A judgment or lien against you or a prior owner.
- Unpaid property taxes.
- A name on the deed that doesn’t match your loan application.
- Unclear ownership after an inheritance.
The lender needs its lien to hold the required priority. Anything ahead of it has to be cleared or subordinated first. If it is cleared from your proceeds, you receive less cash. If it can’t be cleared, the closing can stall.
Picture a homeowner who plans to take out cash for a renovation. The search finds an old line of credit that was never released. Paying it off and recording the release comes out of the proceeds, so the renovation budget shrinks. The fix is usually routine. The surprise is the problem.
Order matters here. Budget your cash-out as “the amount the loan allows, minus payoffs, minus closing costs.” Title charges and any lien payoffs belong in that subtraction.
Ways to Keep the Cost Down
You can’t skip the lender’s policy on most loans. You can still manage the bill.
1. Shop the title provider where the Loan Estimate allows it.
2. Ask about a reissue or refinance discount. Some title companies discount a policy when a prior policy exists. Availability varies by state and provider, so ask rather than assume.
3. Ask your original title company whether they still have your file.
4. Bundle if you want an owner’s policy. Buying both from one provider usually costs less in total than buying them separately.
5. Clean up liens before you apply. Getting old releases recorded early avoids last-minute payoffs.
Common Misconceptions
“My old policy covers the new loan.” It doesn’t. The lender’s policy covers only the lender’s loan, and it ends when that loan is paid off.
“The lender’s policy protects me.” It protects the lender. Only an owner’s policy protects your equity.
“Title insurance is mortgage insurance.” They are different products. Title insurance covers defects in ownership history. Mortgage insurance covers the lender if a borrower defaults, and it is tied to leverage. For that side of the cost, see Lendmire’s explainer Do You Pay Mortgage Insurance on a Cash-Out Refinance?.
“Both policies are required.” The lender’s policy is generally required. The owner’s policy is typically optional.
“Title waivers now apply to everyone.” The pilot is limited. It isn’t a general rule.
“I have to use the lender’s title company.” You can usually shop for title services.
Questions to Ask Before You Close
Bring this list to your loan officer or title agent:
- Is a lender’s policy required on this loan, and is my loan in any title waiver program?
- Which title services on my Loan Estimate can I shop for?
- Do I already have an owner’s policy, and does it stay in force?
- Is there a reissue or refinance discount where I live?
- Did the title search turn up any liens, and what will be paid from my proceeds?
- Does my name on title match my application exactly?
- Are title costs paid in cash or built into the new loan amount?
For more on how the new-policy requirement works, Lendmire has a companion piece Does a Cash-Out Refinance Require New Title Insurance?.
Key Terms Defined
Lender’s title policy: Insurance that protects the lender’s lien against title defects. You pay a one-time premium, and it ends when the loan is paid off.
Owner’s title policy: Optional insurance that protects your ownership and equity. It lasts as long as you own the home.
Lien: A legal claim on your property that secures a debt. A mortgage is a lien.
Title search: A review of public records to confirm who owns the property and what claims exist against it.
Loan-to-value (LTV): The loan amount divided by the home’s value, shown as a percentage.
Seasoning: The minimum time an existing loan or ownership must have been in place before a new loan is allowed.
Attorney opinion letter: A letter from an attorney describing the state of title. It is accepted in place of a policy in limited cases.
Weighing a Cash-Out Against Keeping Your Loan
Title insurance is one line in a bigger comparison. A cash-out replaces your current loan, so you also weigh the new terms, the closing costs, and the equity you can reach against what you have now. 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. You can request a quote or call 828-256-2183. Program details are subject to lender guidelines and full file review, and nothing here is a commitment to lend.
Frequently Asked Questions
Do I have to buy a new owner’s policy on a cash-out refinance?
No. The owner’s policy is generally optional, and the one you already have usually stays with you after the refinance. It is tied to your ownership, not your loan. Ask your title company to confirm for your state and your policy.
Does the lender’s policy protect my equity?
No. It protects the lender’s loan amount against title defects. If you want protection for your own ownership, that is what the owner’s policy is for. Buying both from one provider is usually cheaper than buying them apart.
Can I choose my own title company?
Usually, yes. You can generally shop for title providers separately from your mortgage, depending on how the services are listed on your Loan Estimate. Ask your loan officer which services are on the shoppable list before you pick.
Can I roll the title cost into the new loan?
Often, within limits. Agency guidelines allow closing costs to be included in a cash-out loan amount, and individual lenders may set tighter rules. The trade-off is a larger balance, which raises your payment and your total interest and lowers your net cash.
Is the cost different on a cash-out than on a rate-and-term refinance?
The rule is the same: both need a lender’s policy. The premium follows the amount insured, so a larger cash-out loan can mean a larger premium. Discounts and pricing vary by state and title company.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending partners, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Pilot Transparency
2. FHFA Title Acceptance Pilot FAQs
3. CFPB: What is lender’s title insurance?
4. CFPB: What is owner’s title insurance?
5. Fannie Mae Selling Guide B2-1.3-03: Cash-Out Refinance Transactions
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can a Cash-Out Refinance Pay Off an Unmarried Co-Owner? · Can You Borrow From Family for a Cash-Out Refinance? · Is a Cash-Out Refinance More Expensive Than a Standard Refinance?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.