After you refinance

What changes

• The payoff date, usually pushed further out
• The balance, which may increase on a cash-out refinance
• The payment, which may fall while the total interest rises
• The lender, if the loan is with someone new
• Whether mortgage insurance applies, which a refinance can start or end

The term mismatch

This is the main one. A twenty-year policy bought against a twenty-year loan, refinanced five years in to a new thirty-year loan, now ends fifteen years before the mortgage does.

Check the new payoff year against the end of your policy term. If the policy ends first, you're buying replacement coverage older and in whatever health you then have.

Cash-out refinances

Taking equity out increases the balance, so coverage sized to the old figure is now short by the amount you took.

Also think about what the money did. If it consolidated other debt, your total obligation may be unchanged; if it funded something new, it isn't.

Policies tied to a specific loan

Some mortgage-related coverage is assigned to a lender or tied to a particular loan, and may end when that loan is repaid — including by refinancing.

Check whether yours survives. This is a strong argument for holding a term policy you own outright, which doesn't care what your lender is called.

The five-minute check

• New payoff year against your policy's end date
• New balance against your coverage amount
• Whether the policy is tied to the old loan
• Whether mortgage insurance now applies, or has ended
• Beneficiary designations, while you're looking
• Whether a conversion privilege is still live, and when it expires