Refinancing? Get a Lawyer Or Title Company
When a person decides that the financial terms are at the right point so it is worth to refinance, then they might want to consider to have some lawyer legal advice or Title company legal escort while refinancing the mortgage loan.
There are many aspects to this decision and it is based upon the way the mortgage loan was taken in the first place.
If all the paper work and details where straightened out, agreed and understood, then there in no legal need for a lawyer to participate in the refinancing process.
If the terms of refinancing are unclear, or any personal changes (divorce..) might have happend during the lifetime of the mortgage loan, then a lawyer that works on your behalf will keep your interests and your ‘back’ when you refinance the home loan.
Lawyer Advice When Refinancing
Actually not any lawyer will be able to help you, you need to look for real estate lawyer as the real estate laws are different from state to state, and your business lawyer or personal lawyer may not know all the fine prints and aspects of the local laws.
When you approach the bank or the lender, and ask to begin the home loan refinance process, you can be pretty sure that they will have a lawyer guidance on their side. But the presence of such lawyer is not enough for you, as the lawyer is there to protect the bank or lender, and he/she concerns will not be evaluating your side of the deal.
A lawyer can negotiate your refinancing rates as a person who is only representing you, he/she has a better position because it is not one of the sides and can ask more demanding requests.
Though having a lawyer take a look at the refinance contract, the new mortgage agreement, paperwork and fine prints could be a safe move. This means having to pay extra money you didn’t plan to pay, and lawyers are never ‘cheap’, but not having a real estate attorney examine the refinancing documentation can be much more expensive in the long run.
What Is a Title Company
When people are selling and buying real estate and because the real estate laws are complex with many legal aspects Title Companies insures that title to real property will not be adversely impaired by undisclosed defects or encumbrances.
The Title companies are experts in this field and have the people and the know how of specific laws and rules that are unique for every state. For this reason before people pay for real property they would like to check the property Title status. When this is done correctly any undisclosed issues that may risk the ownership of the buyer are then found and are placed for resolving before the actual payment process takes place.
Title company And Refinancing a Mortgage
When refinancing the process is taking a new home mortgage and paying the old mortgage out. So refinancing is actually taking a home loan with new rates and conditions. This is where Title insurance company (also known as Title insurer) come into the picture as their business is selling policies of insurance guaranteeing the ownership and quality of title to land.
Unlike taking a mortgage where owner’s title insurance policy is a must, when refinancing the owner’s title insurance is not really necessary. This may change at different states, in some the owner’s title you already purchased with the original loan will suffice, in other states it depend how long ago the owner’s title was done.
You might be eligible for discount rates on title insurance on refinance in the state and within your case, you can ask the lender or get professional advice from property law attorney.
What Title Companies Check
The Title company will check and abstract the public land records to investigate the title to the property. This is called “abstract of title” which means searching the real estate records in the county where that particular piece of property is located.
At the end of the examination process the Title company will issue a Commitment of Title Insurance – which will be sent to all parties involved buyer/seller and especially the bank or lender.
In the Commitment of Title Insurance they will specify the contract seller is the legal owner. If there are any open mortgages on the real estate property, and also information that may affect the usage of the property or grant right limitations like existing restrictions, easements, public utilities. In most cases the commitment will include property taxes and other assessments.
When all the needed aspects are finished there will be a – Closing Statement. This Closing statement is also known as HUD-1 which described to details the financial parts of the mortgage refinancing agreement such as:
- Mortgage lender’s charges,
- Charges for preparing mortgage documents,
- The title company’s fees,
- Recording costs, mortgage closing costs.
- The amount of the payoffs to release any existing mortgages,
- Pro-ration of city and county taxes,
- Real estate commission fees,
- Survey fees,
- And any other costs associated with the deal.
Lawyer or Title Company
There are pros and cons to lawyer or title companywhen refinancing, you need to check whether all the details of the refinance documentation are clear to you. If there are no major changes and you are familiar with the fine prints and the lender has a Title company dealing with the new mortgage then hiring a lawyer might nt be needed.
If some of your personal needs have changed and the refinance needs to cover those issues, then you need to find a property real estate lawyer to keep your new interests.
So What Can You Do To Improve Your Situation?
If you will do nothing.. don’t expect anything to happen. The best advice is to bump your credit score up! It will give you better leverage when facing the lenders, and better negotiation position when applying for any financial need.
Lets not forget you are probably paying $500-$1000 extra per year in higher interest rates, and credit payments.
If your score is below 700, you might want to clean it yourself – get this ‘Credit Repair University’ which will save you money and time.
Yes, you might need to invest a small sum to get a grip of things.. But if you think education is expensive.. try ignorance..
You are probably paying thousands of dollars per year in fees and interests to credit companies which could be going straight to your pocket. Don’t be cheap when it comes to financial education..
Ignorance costs more.