Refinancing their mortgage is one way many Canadian homeowners access funds to pay for big-ticket items such as a car, a second home, home renovations, or a child’s education, and sometimes even debt. If you are considering this type of borrowing, please keep reading to learn about some of the legal implications involved and ways in which a lawyer can help.
What Is Mortgage Refinancing & Who Can Use It?
Mortgage refinancing is essentially entering into a new borrowing agreement based on the worth of your home. To qualify for mortgage refinancing, you must have at least 20% home equity. In other words, you need to have already paid for at least 20% of your home. An acceptable credit score and debt-to-income ratio are also required. Your financial institution will explain all the financial requirements and considerations in great detail, while this article and a real estate lawyer will help you understand the legal terms of mortgage refinancing.
Financial Agreements Are Legal Agreements
Your refinanced mortgage will be a legal agreement as well as a financial one. Therefore, it is important that you understand all the terms and legal implications of it. To that end, it is prudent to seek the assistance of a real estate lawyer to:
review the document
help you understand the terms of your refinancing agreement
ensure compliance with all lending and real estate laws
Five Things a Real Estate Lawyer Can Help You With
Understand the Legal Documents Unless you are a lawyer yourself or extremely accustomed to mortgage refinancing, it is helpful to have a legal professional review your new mortgage agreement or closing disclosure statement, the promissory note, the deed of trust or mortgage, and other related documents. In addition to ensuring their legal accuracy, your lawyer can also explain the documents and terms to you.
Comply If you do not know the terms, laws, and regulations involved in refinancing a mortgage, it will be difficult for you to comply with them. Furthermore, it will also be difficult for you to know whether your lender is complying with them as well. To ensure compliance on both sides, ask a real estate lawyer to review the refinancing documents. Some of the details they will check are the interest rate, the repayment period, fees or charges related to the transaction, etc.
Perform Title Searches A real estate lawyer can ensure there are no outstanding liens or other issues associated with the property title that has the mortgage you want to refinance.
Title Insurance To help protect you against any legal issue with the property title, such as those mentioned above, or a boundary dispute, a real estate lawyer can help you procure title insurance.
Closing the Refinance Transaction Your lawyer will discharge your existing mortgage and register the new one. They may also tend to or lead you through the process of paying any fees or charges associated with the transaction.
Do You Need to Transfer Before Refinancing?
Sometimes, it is legally and/or financially necessary to transfer the title of ownership during the refinancing process. Divorce and death of an owner are common reasons for adding or removing someone from the title.
A lawyer is required for property transfers and title changes, and, as you read above, they are extremely helpful for ensuring a legal transfer or refinancing of the mortgage.
Mortgage Discharge
Hurrah! You have paid your refinanced mortgage in full and received a discharge of mortgage that certifies that fact. A lawyer can be used to ensure that the document is complete and officially frees your property from the mortgage and you from further obligation.
Find a Lawyer to Help You Refinance Your Mortgage
At Kelowna’s Heritage Law Group, the practice of law is part of our heritage: three generations of our family have worked hard to provide clients with proven results. Our dedicated team of lawyers is experienced and service-oriented. We are committed to helping protect you and your legal rights, and we consider it our privilege to provide you with customized solutions to help resolve your legal issues, including mortgage refinancing.