Is a Mortgage Refinance Right for You?
Refinancing your mortgage can have many benefits, including debt consolidation, locking in a lower interest rate, and much more. However, you should never rush into the refinance process without considering all of your options with the help of an experienced mortgage lawyer. At Nanda & Associates, our lawyers provide advice and representation to residential homeowners to ensure they make the right decision for their specific situation. The following are some reasons why a mortgage refinance may not be the best option at the current time.
You Plan to Move Soon
There are costs and fees involved with obtaining a mortgage refinance, and eventually, homeowners can make up for those fees with monthly savings on their mortgage payments. However, if you plan to move in the next couple of years, you might not have enough time with the refinanced mortgage to save enough to make the fees and costs worth it.
You Have Had Your Mortgage for Many Years
At the start of your mortgage, you pay mostly toward interest, while later payments will address the principal balance of your loan. The same is true after you refinance. If you have already paid down your principal for several years, you might not want to start the entire process over and make interest payments for years before you can lower your principal balance. It might even result in paying more interest over time than you would have with your initial loan.
Your Lender Charges a Prepayment Penalty
Some mortgage lenders include a prepayment penalty in the loan terms. In some cases, this penalty can outweigh the savings that a refinance would bring. This could make it more economical to pay off your original loan according to its terms rather than seek a refinance.
A Mississauga Mortgage Lawyer Can Evaluate Your Options
Many people think that if interest rates go down or they could benefit from access to home equity, refinancing their mortgage loan is automatically the right decision. This is not always the case, and our legal team works closely with our clients to ensure they make mortgage decisions that will most benefit their situation.
If you decide to move forward with a refinance, we can help you through every step of the process. This includes helping with the following and more:
- Determining whether your current agreement allows you to refinance
- Reviewing your new mortgage agreement to ensure that it is in your best interest
- Explain your rights and obligations under the proposed agreement
- Identifying any vague or unclear terms in your agreement and taking steps to clarify their meaning
- Representing you should a dispute arise after the new agreement is executed
Too many residential property owners in Ontario seek a refinance when it is not beneficial or they may make errors during the refinance process. Discussing your options with a lawyer will ensure that you only refinance your home when it is in your best interest and that any refinancing you pursue goes as smoothly as possible.
Contact an Ontario Mortgage Representation Lawyer to Discuss Your Options
Nanda & Associate Lawyers have worked with many commercial and residential property buyers or owners regarding mortgage financing. We can represent you if you are obtaining a brand new mortgage or if you are considering a refinance and would like to know your options. Call our firm at 905-405-0199 or contact us online to schedule your consultation today.