A lawyer can help with a number of important financial transactions, from closing a business deal to resolving personal disputes regarding money. Refinancing a home loan is another very common and important financial transaction during which you transfer a loan balance to a new loan at new terms. Explore whether you might need a lawyer for this type of transaction.
Point of a Lawyer
Before considering whether or not it is necessary to hire a lawyer for a refinancing, understand the point of having a lawyer. Many lawyers have an advanced knowledge of state and federal rules regarding various matters, including financial issues. Though you can do research yourself at the library or online, it is sometimes more advantageous to have a lawyer at your side to ensure that you get the best deal possible.
Refinancing
In a refinancing transaction a new lender takes the reigns of an existing loan. The borrower initiates a new loan and transfers the balance, plus any additional amounts like cash-back from the equity (difference between market value and current loan balance) of the house, to the new lender. The reasons for refinancing range from lower available interest rates to needing to change from an adjustable rate mortgage to a fixed rate mortgage. The process involves a significant amount of paperwork, similar to the documents required to finance a newly purchased house. At closing the homeowner must sign a number of official contracts and statements that make the mortgage agreement official.
Is a Lawyer Needed?
Due to the straightforward process of initiating and closing a refinancing transaction it is unlikely that the borrower would need a lawyer to get involved. However, if the borrower needs help deciphering contracts and terms of the loan, a lawyer is useful. Also, if the borrower has a problem with a lender changing terms as agreed late into the process, he may need a lawyer to help straighten things out.
How to Find a Lawyer
Finding a lawyer who can help with mortgage-related matters isn't always simple. Credit counseling services like the NFCC (National Foundation of Credit Counselors) can refer homeowners to local lawyers who can help with personal financial matters, like refinancing questions. It is also a smart idea for the homeowner to ask for a referral from a friend or family member who has used a lawyer to help close a personal financial transaction.
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