Your Lawyer’s Role in Your Mortgage Transaction

Real estate lawyers are essential to buying a home (you can’t do it alone), and your lawyer’s role in your mortgage transaction can be complex.

By the way, congratulations on becoming a homeowner. You’re in good company. Millions of Canadians get mortgages every year. 

Your lawyer’s role in your mortgage transaction can make the process easier and quicker. Now here’s why having a real estate lawyer is a must.

Refinancing your mortgage — what to expect.  

Signing up important documents

Understanding Your Lawyer’s Role 

How best to understand your lawyer’s role in your mortgage transaction? Your lawyer:

  • receives your agreement of purchase and sale
  • reviews the terms and conditions 
  • suggests changes if needed to protect your interests
  • contacts your lender for mortgage documents
  • discharges mortgages on your current home
  • confirms the seller’s mortgage is discharged
  • and finalizes your new mortgage.

Axess Law can even hand you the keys to your new home.

Drafting agreements of purchase and sale

But first, your lawyer walks you through the closing costs and total debt for your new home, explain your contract’s terms and clauses, and deciphers confusing legal jargon.

Your lawyer’s most important role in your mortgage transaction is to answer questions. They ensure you understand your legal obligations before you commit to a new mortgage, or “port” your existing mortgage to a new property.

Questions to ask a real estate lawyer

Your Lawyer’s Role in Managing Mortgage Risks

A real estate lawyer is one of the few professionals who can advise you on the 3 most common risks associated with a mortgage. 

Risk #1: Mortgage Not Discharged

Having undischarged mortgages on your title can create a legal quagmire. 

Your real estate lawyer protects your financial interests by liaising with the seller’s lawyer to discharge their mortgage, and replace it with your own. The seller pays off their mortgage, and you take possession with a clear title to the property. 

How to discharge a mortgage. 

The title is purged of financial claims by other lenders — so you don’t have to explain to a new lender or buyer why the previous owner’s mortgage is still registered against the property. Your Axess Law lawyer’s role in your mortgage transaction allows you to sell, refinance, insure, or deal with your home any way you see fit.

Risk #2: Property Title Issues

Property title issues can tie up legal possession of your new home in:

  • unexpected errors in public records
  • survey mistakes
  • undiscovered construction liens
  • unpaid debts like outstanding utility payments
  • restrictive easements on how you use your land
  • and more. 

Unless you have title insurance, small problems can delay or complicate your mortgage transaction.

Why title insurance costs are money well spent. 

The good news is that while title insurance is a requirement for many mortgages, it’s well worth the modest ($250 and up), one-time only premium. But don’t confuse it with home insurance that covers damage to your property or personal possessions. Title insurance protects your property title, not what’s on your land or in your home.

Your lawyer’s role includes helping you submit a title insurance claim to collect any compensation you are owed. Now that’s some serious peace of mind. Benefits of title insurance. 

Risk #3: You’re a Victim of Fraud

Homeowners at risk of being defrauded can be gravely financially impacted. Let’s review how fraud can affect a homebuyer and their mortgage.

Title/Mortgage Fraud

“Mortgage fraud” usually starts with identity theft. Someone steals your personal information, then attempts to steal ownership of your home. They may use your identity to transfer the title to your property without your knowledge, either selling it or mortgaging it. Once they collect money from the sale or mortgage of your home, the fraudster disappears, leaving you homeless, with a great deal of debt, or both. When to hire a Toronto mortgage fraud lawyer. 

Identify Theft

Ontario’s Land Registry is incredibly secure, but like any IT systems, it’s susceptible to fraud. Be proactive in keeping your personal information private. Once a fraudster gains access to your identity, it’s not hard to impersonate you, and attempt to steal or place a mortgage on your home using a local land registry office. Talk to a lawyer or the registry if you think your title may have been compromised.

What to do if your identity is stolen. 

Foreclosure Fraud

Trouble making mortgage payments can place you at risk of foreclosure fraud, and that means your lender could foreclose on your home. Don’t be tricked into giving your property to someone in return for a loan to help you make the mortgage  payments. Fraudsters will not only keep your payments, but sell or refinance your home, leaving you with a mess or “homeless“. 

Steps to stopping foreclosure fraud.

Securing documents with lawyers

So what’s your lawyer’s role in protecting your mortgage transaction? Your real estate lawyer searches title to your property to identify potential issues and flag anything that seems  suspicious. They explain the benefits of title insurance and how it can help protect you from fraudulent activities, and arrange to pay the one-time premium. You can rest easy that your property title is insured if a fraudster targets your home for fraud.

Affordable Legal Services, Anywhere in Ontario

Access lawyers for less in Greater Toronto Area, Ottawa, or anywhere in Ontario when you buy, sell, or transfer property. Axess Law’s flat fee real estate lawyers are affordable, and our rates are all inclusive (excluding taxes, disbursements, and third-party charges). Axess Law offers you only the legal services you absolutely need. Your final invoice includes no surprises or hidden charges. Your itemized statement of adjustments is explained when we deliver it, and we answer any questions you have about it.

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