Many home owners and mortgage borrowers are using refinancing as a way of making their home loan payments more affordable. Mortgage refinancing generally involves an adjustment or reworking of existing mortgage terms in order to reflect recent changes in the borrowers situation (such as a new job or a loss of a job). 

In some cases, this can involve negotiations with the current mortgage lender. In other situations, the term mortgage refinancing may involve taking out a second mortgage in order to help with the first mortgage loan. In general, mortgage refinancing typically occurs in the middle of a mortgage payment plan, after the first payments have been made, and adjustments are becoming necessary.

Is Mortgage Refinancing Always Available?

Mortgage refinancing may not always be available. The availability of mortgage refinancing may depend on several factors such as:

  • The terms of agreement between the original mortgage lender and the borrower
  • State laws and guidelines
  • The borrower’s credit history and credit score
  • Whether or not there is a second mortgage or third mortgage being taken out

Also, just because refinancing may be available doesn’t mean that it is recommended. Refinancing an existing loan can lead you into further obligations and can extend the time that you’ll be paying off mortgage debt. It may be helpful in the short-term, but may also have its risks over the long run.

What Are Some Legal Disputes Involved with Mortgage Refinancing?

Of course, the most common legal dispute with property refinancing is a failure to make payments. Many people seek mortgage refinancing because they are already having trouble making payments. Then, refinancing may simply complicate the situation and lead the person into more debt.

Another legal dispute is where the primary and second or third mortgage lenders are competing for the debt payments of the borrower. This can create another confusing situation that may require the help of a lawyer to sort out.  In most cases, primary or first mortgages have priority over second or third lenders when it comes to collecting debt.

Lastly, if mortgage refinancing leads to complete failure to make payments, this can result in a foreclosure proceeding. This means that the borrower may forfeit ownership of their home, and the home may be subject to sale. Foreclosure can be avoided in certain situations depending on state property laws. 

Do I Need a Lawyer for Help with Mortgage Refinancing?

Obtaining refinancing for a mortgage has its costs and benefits. You may wish to hire a real estate lawyer if you need help with mortgage refinancing. Your attorney can provide you with guidance during the negotiation phases, and can also explain your contract rights to you. Also, you may need to hire a lawyer if you will be filing a lawsuit or if you’ll be involved in any type of legal proceeding. Your attorney can represent you during formal court hearings and meetings.