Whether it is a condominium, a castle, cottage, or a house, most Canadians consider acquiring property as one of the most important investments in their lives.
There comes a time where refinancing becomes essential. Mortgage refinancing, just like many other financial and legal transactions, can be a daunting and complex task. It is vital to retain an experienced mortgage-refinancing attorney to protect your interests.
At Rameh law, we have the necessary experience and expertise to help you deal with any real estate concerns, including mortgage refinancing. Get in touch with us today to learn how our experts can help you.
What is mortgage refinancing?
To refinance a mortgage is to apply for a new loan and use it to repay your original mortgage. Mortgage refinancing, thus, involves taking out a new home loan, the same way you did when acquiring the house. However, instead of using the money to buy another home, you use it to pay off the current mortgage.
The process deletes the property debt on your existing mortgage. Moreover, it allows you to choose better loan terms and rates on the new mortgage. Mortgage refinancing can be an excellent way of saving money or helping you accomplish your other financial goals.
Common issues when refinancing a mortgage
There are some considerations when you are planning to refinance your mortgage. While you’re clearing the existing mortgage, you are also incurring another one, and the process is not free of fees and expenses.
The refinance is a new property debt; hence you may incur expenses relating to the title search, appraisals, inspections, mortgage registration, lender applications, and discharge fees.
Thus, while refinancing may come with many financial benefits, it’s vital to consider whether the benefits outweigh the cost carefully.
Why refinance a mortgage
The most common reasons why most homeowners refinance their mortgages include:
To change the terms of the loan: a homeowner often qualifies for a low-interest rate if they can decrease the loan-term from, for example, 20 years to 10 or 5.
Lower interest rates: if interest rates in the market have declined or your credit score has improved since you took out a loan to buy the current home, you may save some money on reduced monthly payments and interest rates.
Access to home equity: the difference between your home’s value and its mortgage balance is your home equity. If you urgently need huge cash, you can undertake mortgage refinancing to get up to 80 percent of your home’s value.
To change the type of rate on the mortgage: homeowners whose existing mortgages have adjustable rates can accrue some benefits by shifting to mortgages with fixed rates. Such a move can help shield them from Market fluctuations.
Why you need an attorney during mortgage financing
You need a real estate attorney to help navigate the decision of refinancing your mortgage. The process can generate many legal issues; hence you need guidance from an expert in the field. It will help to have a lawyer for:
The real estate sector is full of predator lenders. These are people who target unsuspecting clients with deceitful tactics, for example:
- Provision of misleading information about the terms of the loan
- Wire frauds
- Tittle frauds-duplication of title deeds of disputed or vacant properties
- Fees different from good faith estimate (GFE)
While these schemes may appear affordable and good on the surface, they are deceptive and can trap you into a vicious circle of debt. If you work with a lawyer, they will help you gauge whether the time, fees, and costs are legitimate.
Protection of your interests
The commitment for the mortgage refinancing deal may not match what you are applied for. For example, the terms of your commitment may differ from the loan documents). You do not expect the mortgage company, the commercial Bank, their representatives, or lawyers to help you in such matters. While these people may agree to handle the entire process, they do not work to represent your best interest.
When, for example, the other party has hired a lawyer to review the terms of the transaction with you, your clear understanding of the deal won’t be their priority. They will probably not disclose anything that may be unfavorable to you as long as it is favorable to their client. It would be good to have a lawyer too on your side working to protect your interests.
Timely discharge of the mortgage of record
The home debt you are paying off must be properly and quickly discharged of record. If the previous mortgage takes too long to get discharged of record, it may take longer for you to get a clear title of the property. Under such circumstances, it may not be easy for you to sell the property when the need arises.
Closing is often delayed when a previous mortgage can’t be discharged of record quickly. If you handle your mortgage refinance improperly, it is likely to lead to delays in the loan record discharge. Thus, any property refinancing deserves the attention of a skilled and experienced real estate lawyer.