Refinance closings in Utah

A refinance closing is a purchase closing with most of the parts removed. Nobody is buying anything, so there is no deed, no commission, no buyer, and no new owner's title policy. What remains is a new loan replacing an old one.

Practically, that means: a new title search, a new lender's title policy for the new lender, a payoff of the existing loan, and a signing that usually takes around half an hour. Your existing owner's policy — the one you bought when you purchased the home — is unaffected and stays in force.

What is different from a purchase

The shorter list is the main reason a refinance closing costs less than a purchase closing. It is not a discount; there is simply less to do.

Why there is a title search at all

People reasonably ask why the property has to be searched again when nothing has changed hands and they have owned it for years.

The answer is that things attach to a property without the owner doing anything visible. Between your purchase and today, the record may have picked up a judgment, a tax lien, a mechanic's lien from work you had done, a second mortgage or line of credit you forgot was still open, an HOA assessment, or a financing statement filed by an equipment vendor.

Your new lender is about to take a security interest in the property and needs to know it will be in first position. The search establishes that, and the lender's policy insures it.

The search also occasionally catches something in your favour — a lien you paid off years ago that was never released, which is far easier to clear now than during your next sale.

Why your lender wants a new policy

A lender's title policy is tied to a specific loan. When you refinance, that loan is paid off and ceases to exist, and the policy insuring it goes with it. The new lender is a new insured with a new loan, so it requires a new policy.

Two things follow:

You do not buy a new owner's policy. You have not sold anything or bought anything. Your owner's policy from your purchase continues for as long as you own the property. If anyone suggests otherwise, ask why.

A reissue or refinance rate may be available. Where a property has been insured recently, a discounted rate on the new lender's policy is sometimes available, usually on production of the prior policy. Ask about it, and dig out your old policy before you do — it is worth the ten minutes it takes to find.

What a refinance search commonly turns up

These are the things that most often surprise a homeowner, in rough order of how often they cause a delay:

A second mortgage or HELOC you still have open. Even at a zero balance, an open line of credit is a recorded lien and your new lender will require it to be paid off and released, or formally subordinated. Subordination takes time and depends on the other lender's cooperation, so flag it at application, not at signing.

A judgment against someone with your name. Judgments are indexed by name, so a judgment against a different person with a similar name can attach itself to your file and has to be cleared by affidavit.

Unreleased liens from a previous payoff. A loan you paid off where the release was never recorded. Common, fixable, and slow if it is discovered late.

Contractor and supplier liens. Recent work on the house, particularly where a subcontractor was not paid by the general contractor.

Financing filed against equipment attached to the house. Solar equipment is the case we see most: the financing is often recorded against the property, and the new lender will want to know exactly what it is and where it sits in priority. Have your solar paperwork to hand if this applies to you.

Property tax status. Taxes owed against the property will be identified and usually have to be brought current.

Anything involving a trust, a divorce or a death. If title has changed since you bought — into a trust, out of a former spouse's name, through an estate — the documentation has to be reviewed. Tell your escrow officer at the start.

The payoff

The mechanics of replacing one loan with another are simple and worth understanding, because they explain the numbers.

We order a payoff statement from your existing lender, good through a specific date. It includes principal, interest to that date, and any charges the lender adds. Interest accrues daily, so the payoff figure changes if the closing date moves — which is why a payoff quote always names a date.

Your new loan funds, we pay the old lender, and the old lender records a release of its lien. If your old loan had an escrow account for taxes and insurance, that balance is refunded to you by the old lender directly, usually a few weeks later and separately from anything that happens at closing. It is not part of your closing figures and it is the most common "where is my money" question after a refinance.

The signing

Practically the same as a purchase signing, and shorter.

• Everyone on title signs, whether or not they are on the new loan.
• Bring an unexpired government-issued photo ID for each signer.
• Expect around thirty minutes.
• You will sign the new note, the new deed of trust, the settlement statement and the lender's disclosures.
• If money is due from you, send it by wire ahead of time and verify the wire instructions by phone first, on a number you already have. Wire instructions do not change by email. If you receive a message saying they have, call us on +1 (801) 266-0606 before doing anything.

The general guidance on what happens at your closing appointment applies here too, minus the parts about deeds and commissions.

The right to cancel

Many refinances on a primary residence carry a three-business-day right to cancel after signing. Where it applies, the loan does not fund and nothing is disbursed until that period has run, which is why a refinance often completes several days after the signing rather than the same day.

It does not apply to every refinance. Your lender will tell you whether your loan carries it and will give you the notice explaining how to exercise it. Read that notice and keep it — the deadline is short and it is counted in business days.

Funding, recording and what arrives afterwards

After signing, and after any cancellation period:

1. The new lender reviews the package and funds the loan.
2. Escrow pays off the old loan and disburses any other proceeds.
3. The new deed of trust is recorded with the county.
4. The old lender records a release of its lien - this can take weeks and happens after your closing is complete.

Things that arrive later, and are normal: your escrow refund from the old lender; a notice from the new lender telling you where to send payments; and, if your loan is sold, a transfer notice. Keep making payments to whoever your current servicer says until a transfer notice tells you otherwise.

Keep your closing package. The settlement statement and the new note are the documents you will want if a question comes up later.

Questions we get asked

Do I need a new owner's title policy?

No. You are not buying the property again. Your existing owner's policy continues. See what title insurance protects you from.

Why am I paying for title insurance again, then?

You are paying for the lender's policy, which insures the new lender's new loan. It is a different policy protecting a different party.

How long does a refinance take?

The loan process is usually weeks and belongs to your lender. The closing itself is one appointment of about thirty minutes, plus any cancellation period, plus funding and recording.

Can my spouse skip the signing if they are not on the loan?

Usually not. Anyone on title is generally required to sign, and sometimes a spouse must sign even when not on title. Your escrow officer will confirm for your file.

Can I do it remotely?

Sometimes, depending on your lender and the transaction. Ask early.

What should I gather before I start?

Your existing owner's title policy, payoff information for every loan and line of credit secured by the home, your most recent property tax notice, HOA contact details if you have one, and paperwork for any solar or other equipment financed against the property.

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Refinancing in Utah and want the title side handled cleanly? Call +1 (801) 266-0606 or tell us about the property.