If you are looking to save a little money, refinancing your mortgage may be an option to consider. By replacing your current home loan with a more manageable mortgage means a reduction in your monthly bill, even if it means the length of your loan increases. But refinancing comes with many complex legal concerns, and it’s beneficial to have an experienced refinance mortgage attorney by your side to help you with the process.
At Mazzoni Karam Petorak & Valvano, our Scranton real estate attorneys have been working with clients throughout Northeastern Pennsylvania since 1962. We understand the complexities involved in these transactions and can help simplify the whole process, making sure you’re getting the best loan terms possible.
Do I Need an Attorney to Refinance My Mortgage?
When you try to refinance your mortgage on your own, although you may be saving money, you could run into trouble down the line. You may be facing penalties, processing fees, commission fees, and lender charges. But by hiring an attorney, you can keep all these costs under control.
By hiring a refinancing mortgage attorney, it will help avoid legal problems you may run into down the road, such as:
- Availability: Refinancing may not be an option, depending on the terms of your real estate contract and Pennsylvania laws.
- Foreclosure: If there is a foreclosure proceeding filed against your home, this can make your process more difficult.
- Negotiation Challenges: Not everyone is a born negotiator. If you are inexperienced in negotiating new contract terms, you may end up paying more than you should be.
- Debt Issues: Refinancing your mortgage may mean you’re incurring more debt. Failing to keep up with high payment amounts may mean financial debt and legal woes.
There are also reasons you may not want to refinance your mortgage that you may otherwise not be aware of. Not only may it put you at a financial disadvantage, especially if your home has decreased in value for some reason. You may also not want to stay in the house long term, which will cost you more in the future.
The Refinancing Process – Refinancing Your Mortgage
There are several steps involved in refinancing your mortgage. Your first step should be examining your current mortgage. Check to see if there is a prepayment penalty and know what your current interest rate is. These are important facts to know before you begin shopping around for a new mortgage. You may also want to examine your budget and see how much you are able to feasibly pay each month.
Once you know the specifics of your current mortgage, it’s time to see what’s out there. When shopping for a new mortgage, keep these options in mind:
- The type of refinancing option, such as cash-out or rate-and-term
- The type of loan, either adjustable-rate or fixed-rate
- The length of your new mortgage
- The current mortgage rate
- The closing costs
At this time, it’s beneficial to have an attorney helping you with the process. The attorney can advise you on what your best option may be and help you avoid any schemes and scammers out there. There are predatory lenders out there who will attempt to entice you to refinance at a reduced interest rate. However, these scams don’t explain the costs and fees involved and usually warrant a fee upfront.
Once you choose a lender, you’re going to want to lock in your rate, meaning your lender will commit to the day’s rate options, even if your rates go up in the future. Then comes the paperwork. You will need tax returns, W-2s or 1099s, bank statements, and any alimony or child support payments as proof of income.
Signs You May Be Victim of Predatory Lending
Predatory lending occurs when a lender uses deceptive or scam tactics to entice a borrower into taking a loan, without knowing the full terms and raking up additional expenses. This practice was a particular problem in the 2008 mortgage crisis. But it still occurs today.
If you suspect you are a victim of predatory lending, here are some common warning signs you may want to be aware of.
- The offer is too good to be true. If it seems like the lender is promising to fix all of your financial woes, there’s probably a catch in the form of fine print you won’t be aware of until it’s too late.
- You are not told a definitive cost for the loan. If the lending companies website or representative does not give you clear parameters for the actual cost, it’s most likely incredibly inflated for their benefit–not yours.
- The lender doesn’t do a credit check. If the lender doesn’t look into how you’ve handled debt in the past, it’s most likely because they hope you cannot make payment and have to continue building on your loan.
Our Refinancing Mortgage Lawyers are Here to Help
At Mazzoni Karam Petorak & Valvano, we want you to get the best possible outcome for your mortgage, one that fits your needs and won’t hurt you financially. We will negotiate with lenders on your behalf to make sure your costs are minimal. We’ll walk you through the refinancing process and will advise you on what your next steps should be.
If you are considering refinancing your mortgage, don’t go through the process alone. Contact the Scranton refinancing mortgage attorneys at Mazzoni Karam Petorak & Valvano today for a free consultation. Serving clients in Lackawanna and Luzerne counties, Wayne County, Monroe County, and Pike County.