Alpharetta Refinancing Mortgage Lawyer

You may consider refinancing your home mortgage loan if you are paying a higher interest rate than the current rates. This decision can save you hundreds a month, allow you to take cash out to pay other bills, remodel, or finance a vacation or tuition. You can also pay down your mortgage faster by adding extra money to your lowered payment, which will be allocated to the principal.

However, there are potential downsides to refinancing, making it crucial to discuss your situation with an experienced attorney. The process can be complicated, and lenders have lawyers on their side to protect their interests, not yours. To get the legal advice you need, reach out to an Alpharetta refinancing mortgage lawyer at Sparks Law.

Mortgage Refinancing Basics

Lenders hold mortgages in the names of buyers, who make monthly principal and interest payments until the mortgage amount is paid off. If homeowners wish to refinance, they will do it by paying off the existing mortgage and entering a new one.

Homeowners should know what the terms of their original mortgage say about paying it off and refinancing. They can choose to refinance with the original mortgagor or select another with more favorable terms. It is important for a homeowner to know some basics before making this decision, such as their credit standing, any prepayment penalties for paying off the original mortgage, and potential fees for refinancing.

Even if a homeowner sticks with their old lender, the lender may charge again for a title search, appraisal, and application and closing costs. A lawyer at our Alpharetta office could further explain these pros and cons of refinancing a home mortgage.

Predatory Lending in Alpharetta

Predatory lending exploits homeowners into accepting unfair terms for refinancing because they have credit issues or face an expensive emergency. For instance, a homeowner may have lost their job and will not qualify for conventional loans. Along with excessive fees, a predatory lender can profit by foreclosing on a mortgage in which the property securing it has substantially increased in value.

Some red flags an experienced local attorney will look for when considering mortgage refinancing options include:

  • Deception in which the lender does not disclose the loan’s actual terms or changes them before they are finalized
  • Pushing a cash-out refinance for more than the borrower needs or can afford to repay because there is equity in the home
  • Tacking on products the homeowner may not need, such as credit insurance to pay off the mortgage if the homeowner dies
  • Selling the homeowner on a balloon mortgage with lower initial payments that skyrocket later in the refinancing term
  • Adding stiff penalties for prepaying the loan
  • Offering a negative amortization loan in which the payments do not even cover the interest due, adding to them to the loan and resulting in more due than what the homeowner borrowed

Without a knowledgeable nearby attorney to protect their interests, many homeowners may be impacted by predatory lending when refinancing their mortgages.

Other Considerations When Refinancing

Homeowners with high-interest debts such as with credit cards may decide to take cash out for refinancing a mortgage. However, borrowers need to understand their relationship with credit. Is refinancing a home to pay off consumer debt beneficial if they incur a larger mortgage but continue using the credit cards?

Borrowers should understand that mortgage interest rates vary, and those with lower credit scores and a higher risk of non-payment may end up with subprime loans. Protection exists under the Home Ownership and Equity Protection Act (HOEPA), which requires lenders making high-cost loans to follow additional guidelines.

All real estate transactions in Georgia require an attorney at closing. Although the attorney is usually representing the lender, a borrower should also consider having an attorney experienced in refinancing mortgage in Alpharetta.

Speak to an Alpharetta Refinancing Mortgage Attorney

If you are considering refinancing your mortgage, an experienced attorney can explain the process, walk you through the benefits and drawbacks, and represent you at closing. Let an Alpharetta refinancing mortgage lawyer protect your best interests and advocate for you at every step of the way. Call Sparks Law today if you wish to talk about refinancing your mortgage.