Get a lawyer if you refinance your mortgage. You’ll thank yourself. A lawyer could be the only one 100% on your side.
Renewing Your Mortgage With Your Current Lender
Normally, you won’t have to refinance when your mortgage loan is up for renewal. You can just wait for your mortgage lender to send you a renewal offer. Hopefully, you’ve kept your mortgage payments up to date. Provided your credit is good, most Ontario banks, credit unions and trust companies will offer you a competitive interest rate. No shopping around to get the best interest rate. Just sign where indicated and you’re off.
Low Rates May Last a Long Time
We have to admit interest rates are at historic lows. How long will it last? The federal Bank of Canada, which sets interest rates, has repeated its July pledge to keep its overnight lending rate at 0.25%. The rate will stay put for now to tame inflation. Economists say that could mean low interest rates for as long as the next three years.
Getting the Best Mortgage Rate You Can
No urgency then. Still, you might as well play the market, you say. By all means, if that meets your family’s or personal money goals. Can your credit score withstand the scrutiny? Lenders query your credit score if you try to refinance. That could bring unwelcome attention to your finances. The best strategy, according to The Motley Fool investment advisors, is to ask several lenders at once. That will show up on your credit report as a single enquiry, not multiple requests.
How a Lawyer Can Help
That went better than you thought. Why on earth would you need a lawyer just to refinance a mortgage? Plenty of reasons. Mortgage loans involve volumes of paperwork. Unless you’re a legal eagle yourself, working your way through it all can get pretty intense. Your other option, besides getting a competent real estate lawyer to do the legwork, is to simply ignore it and sign away your bank account (and maybe home).
Six Reasons to Get Legal Advice When Refinancing
A real estate lawyer looks at all the angles. They go through the legal documents painstakingly. Little evades their critical eye. Questions your lawyer might ask include:
- Do penalties apply if you pay off the mortgage, or part of it, before the mortgage term is over?
- Can you rent out your property? With or without your lender’s permission?
- What happens if you fail to make mortgage payments? Can you take a mortgage payment holiday and for how long? Will the lender sell the property if you default or seize it and foreclose? Can the lender sue you?
- How does the home equity line of credit (HELOC) work? Is it a demand loan or second mortgage charge against your property?
- Is the interest rate fixed or variable? Will you owe more at the end of the year if interest rates go up but your monthly mortgage payments are fixed? In other words, if you haven’t covered the full costs of the principal by year’s end?
- Does the mortgage cover just your home or will it pay off your credit card or other consumer debts as well? Is your spouse or partner on the property title?
What Your Lawyer Will Do
Your lawyer has certain responsibilities when it comes to finalizing your mortgage refinancing. They review the new loan and its terms and conditions. That includes the details of actions your lender can take if you intentionally or accidentally default on your mortgage, such as not paying the mortgage, property taxes or strata fees when they are due. Your lawyer has your back if your mortgage agreement includes any unusual fees or charges.
Registering the New Mortgage
Your lawyer can register the new mortgage electronically and prepare mortgage directions for where the money will go. Your existing lender will be paid off from the new mortgage funds.
Getting the Property Deed
The property title search checks for financial liens (debts you owe before you can get clear title). If desired, your lawyer can add others, such as a spouse, partner or family member, to the title. A statutory declaration that the property title is clear and free is part of the final documents you receive.
Preventing Conflicts of Interest
Many lenders will pay your legal fees to get your business. If your lawyer is acting for both you and your lender, they will prepare an acknowledgement of conflict of interest for you to sign. Now that was easier than you thought.
Sign Refinancing Documents for Your Mortgage
Axess Law Ontario real estate lawyers sign bank documents to make your mortgage refinancing deal legal. Online video calls are available anywhere in Ontario, at times convenient for you, 7 days a week. Book an appointment by dialing toll-free to 1-877-552-9377 or 647-479-0118 in Toronto or using our online booking form. Our experienced Ontario lawyers can meet you in person at our Toronto, Scarborough, Vaughan, Etobicoke, Ottawa, Mississauga Winston Churchill or Mississauga Heartland law offices.
Click here to learn more about Axess Law’s real estate law services.
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