Becoming a homeowner for the first time can be a daunting experience, and many find the end of their first mortgage term equally stressful. From changing rates and penalties to seeking a different lender, refinancing a mortgage can be a difficult task without the right understanding and guidance. This is why hiring the lawyers at Zinati Kay – Real Estate Lawyers to refinance your mortgage is a wise idea. Our mortgage refinance lawyers in Toronto understand the ins and outs of this process and can look into your unique situation to provide the best options and solutions. Here’s what you need to know about mortgage refinancing and how you can get help.
What Is Mortgage Refinancing?
Mortgage refinancing is the process of paying off an existing loan and replacing it with a new loan with different terms than the original mortgage. Some homeowners refinance their home to obtain a lower interest rate; shorten the term of their mortgage; convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage (FRM), or the other way around; use a home’s equity to finance a large purchase; remove someone from the title; access funds for investing; or consolidate debt. Some of these reasons have pros and cons, and since refinancing your home can be costly and stressful, homeowners should discern whether their reason for refinancing provides a true benefit.
Some confuse mortgage refinancing with a second mortgage, but they are much different. A second mortgage is in addition to your first, and does not replace it, however, mortgage refinancing will give the borrower new money that can be used to pay off the original mortgage, with better terms to move forward with.
When Should You Refinance a Mortgage?
There are several circumstances in which you should refinance a mortgage and these include the following:
- Secure a Lower Interest Rate: Historically, refinancing your mortgage was worth the cost if you could reduce your interest rate by two percent. Now, lenders say one percent savings is enough of an incentive. Doing this also helps you increase the rate at which you build equity in your home and can decrease the amount of your monthly payments.
- Shorten Loan Term: When interest rates drop, homeowners can refinance an existing loan for another loan that has a significantly shorter term. Switching may not change your monthly payments by much.
- ARM to FRM: Converting to a FRM may provide lower interest rates although ARMs generally start off offering lower amounts. This is due to periodic adjustments to ARMs that can result in rate increases that exceed FRMs. Switching to a FRM can eliminate concern over future interest rate hikes.
- FRM to ARM: This motivation can be a sound financial strategy when the interest rate continues to drop. When this happens the periodic rate adjustments on ARMs result in decreasing rates and smaller monthly payments, which eliminates the need to refinance when rates fall. On the other hand, when rates rise, switching to an ARM would be unwise.
- Tap Equity & Consolidate Debt: Refinancing your mortgage may not always be a wise choice, as it can be a slippery slope to never-ending debt. Keep this in mind when considering refinancing for tapping into home equity or consolidating debt. Accessing equity is often done to cover major expenses like a child’s education or home remodelling. Refinancing can also be done to consolidate debt by replacing high-interest debt with a low-interest mortgage. This step, however, should only be taken if you can resist the temptation to spend once the refinancing gets you out of debt. This motivation to refinance your mortgage requires extreme self-control not to repeat the cycle and get into debt once again by using the credit.
Do I Need a Lawyer to Refinance My Mortgage?
If you want to refinance your mortgage and want assistance into navigating the decision, seeking help from a real estate lawyer is the solution. Since refinancing a mortgage can bring about various legal issues, working with Zinati Kay – Real Estate Lawyers is a huge benefit. Our lawyers can help you deal with the availability of mortgage refinancing; foreclosure sales and junior mortgages; expediting the process; negotiating contract terms; and other aspects of mortgage refinancing laws.
Our lawyers can help you in a number of situations such as:
- Residential mortgage refinancing or financing
- Commercial mortgage refinancing or financing
- Non-mortgage refinancing loans
- Construction mortgages
- Private lenders
What Are the Legal Fees for Refinancing a Mortgage?
The legal fees for refinancing a mortgage depend on the location and motivation for your refinancing, but the savings you make are likely to exceed the legal fees and can be as high as thousands of dollars. Our approach to mortgage refinancing is the same as it is for purchases and sales. We provide our clients with a fixed closing cost of $999 for all fees and disbursements, plus HST, title insurance and registrations to complete most refinance transactions. We pride ourselves on our ability to complete mortgage refinancing fairly quickly for our clients. Quite often our clients do not wish to wait a long time to refinance their property and receive their funds.
How Our Real Estate Lawyers Can Help You Refinance Your Mortgage
If you are looking for help from lawyers in Toronto to refinance your mortgage, consider Zinati Kay – Real Estate Lawyers. We are a full service residential real estate law firm that provides fixed closing costs to buyers and sellers when they buy, sell, mortgage, or title transfer their property. We have been in business for 20 years and have closed over 18,000 real estate transactions. We have three lawyers to service our clients and were one of the first firms to provide fixed closing costs. We provide professional service and reasonable real estate lawyer fees and have thousands of satisfied clients to prove it. Please feel free to contact us at (416) 321-8267 or at firstname.lastname@example.org for a quote on your refinance transaction or to find out more information about our services.