To refinance a mortgage is to get a new loan for the home or business (typically at a lower interest rate), which is used to pay off the first mortgage and continue forward as the lone mortgage for the property. Refinancing has its pros and cons, and meeting with a real estate lawyer can help you determine if refinancing your loan is the best choice for you moving forward. Moreover, a real estate lawyer can help comb through the documents to ensure your best interests are stated and that you understand the contract wholly before moving forward.

Pros To Refinancing

While these are typical advantages for refinancing your home or commercial property, each situation is different.

  • Reduce an interest rate
  • Shorten or lengthen a repayment time
  • Lower monthly payments
  • Take out cash
  • Consolidate multiple mortgages into one loan
  • Switch mortgage type to avoid rising interest rates
  • Stop or reduce payments for private mortgage insurance

Cons To Refinancing

Like the pros to refinancing, there is a list of things typically considered disadvantages.

  • Closing costs, fees, and other paying points may be higher than the savings achieved during refinancing
  • Possible penalty for early payoff of existing mortgage
  • Switch mortgage type and possibly face rising interest rates
  • Long-term interest may make the new mortgage more expensive than the old one
  • Removing equity (cash) from the home makes you owe more on the loan
  • Removing equity could make you susceptible to now pay private mortgage insurance
  • Approval for a new loan can be difficult
  • Lengthen a repayment time

Ask A Real Estate Lawyer

Prior to moving forward blindly with refinancing a mortgage, do your homework and meet with an expert outside the banking industry to make sure you’re getting unbiased advice. An attorney can help you determine if there will be problems down the road if you move forward with a certain type of refinancing in your situation, as well as if the costs of refinancing will be cost-effective and worth the effort.

Our team has offices in The Bronx and Poughkeepsie and offers reasonable prices for our clients’ convenience.