 |
|
|
|
Protect your interests during refinancing
TORONTO, May 10 / - Spring is when many a consumer's thoughts turn to
homebuying. But for thousands of Canadians, spring is also the time to think
about mortgage refinancing. People may have caught the renovation bug and
require funds to finance home improvements. Or they're wanting to capitalize
on lower interest rates to perhaps buy a cottage or investment property. Or
the term of their existing mortgage could be coming to an end and it may be
time to re-negotiate their mortgage.
No matter what the scenario, a mortgage is typically a family's single
largest financial commitment, and professional advice can be invaluable in
helping them save money, and protecting their interests.
"We know of cases where homeowners entered mortgage loan transactions
without legal advice and didn't understand the deal or the implications of
it," said Kathleen Waters, an experienced real estate lawyer and Vice
President of TitlePLUS title insurance.
"For example, sometimes people don't realize their home may be security
for a line of credit - which then needs to be repaid when the property is
sold. Another example can involve borrowers not understanding the legal
implications of proposed changes to names on title or of being a guarantor or
co-borrower. Having a lawyer involved in the process helps borrowers
understand the transaction and know their legal options."
<<
Waters suggests homeowners take the following steps when considering
refinancing their mortgage.
1. Determine whether you wish to borrow from your current lender again,
or if you wish to work with a different lender - perhaps based on who
is offering better terms or a better interest rate:
- Individuals borrowing from the same lender will find the
process to be fairly straightforward. Usually, the lender will
notify you and request that you attend at the lender's office
or bank branch to sign some documents. Some lenders even send
you the documents and you sign them at home and mail them back.
- However, individuals borrowing from a different lender need to
apply for a new mortgage, and this process can be more complex.
It is possible to apply to the lender directly, or engage the
services of a mortgage broker to help with the process.
2. Don't just sign the mortgage documents. Protect your interests and be
sure you understand what you're signing, both in term of your
obligations and those of the lender. Many people routinely sign
documents as borrowers, effectively waiving the right to legal
advice. They don't realize their real estate lawyer can provide
advice during refinancing just as he or she did at the time of home
purchase. Your lawyer will counsel you and work to protect your
interest, in terms of:
- The specifics of what you are borrowing;
- The security that you are giving to the bank in exchange for
borrowing the money;
- The lender's Standard Charge Terms (including what the lender
can do if you do not make your mortgage payments or other
payments on time, such as condominium common expense payments,
property tax payments); and
- An explanation of what is currently on the title to your home.
The lawyer will also work to ensure that the old mortgage(s) get paid
off from the money provided by the new mortgage, and that the old
mortgage(s) get discharged (that is, get removed) from the title to
your property. Otherwise old mortgages can be a problem when it's
time to sell.
3. Reconsider your protection in case of fraud. When you refinance your
home, it is a good time to have a legal check-up on various issues,
such as whether your will is up-to-date and whether you need
additional protection for the title to your property. One of the
things that title insurance policies generally cover is fraud. If you
did not get a title insurance policy when you bought your home, you
can obtain a TitlePLUS OwnerEXPRESS policy with the assistance of
your TitlePLUS lawyer, to give you solid financial protection and
legal assistance in case your property is the target of a fraudster
in the future.
>>
"Refinancing the mortgage on your home is an important transaction for
most homeowners, with both benefits and risks, depending on the
circumstances," Waters said. "Canadians can protect their interests by
educating themselves about the process, and working with a trusted advisor,
such as their real estate lawyer."
A Free Guide
The TitlePLUS program has created a free online Real Simple Real Estate
Guide to educate home buyers on the role of a real estate lawyer and the key
issues around title, as well as specifics for individuals interested in
refinancing their mortgage. The Guide also includes financial calculators, a
glossary of terms, and a locate-a-lawyer tool. The Guide is available at
www.titleplus.ca.
MyMortgageBC.com note: Title insurance can protect you in the event of someone obtaining title to home through fraud. Although title insurance is not something people have purchased often in the past it is becoming more and more popular. |
|
|
