Refinancing a mortgage is away to help make the mortgage payments more manageable for a homeowner. This typically involves a renegotiation of some of the loan terms, such as interest rates or monthly payment amounts. It can sometimes involve a second mortgage company who will lend the person another loan to help with the first (sometimes called a junior mortgage or second mortgage).

In order to refinance a mortgage, the person usually needs to bring up such options when they first sign with the mortgage company. The company may have a policy that refinancing is only available after a certain amount of time (for instance, only after 2 years from the date of the original signing).

What Legal Issues May I Encounter When Refinancing a Mortgage?

Various legal issues can arise when refinancing a mortgage. If you need to refinance a mortgage, you should consider:

  • Availability: Refinancing a mortgage is not always available. It may depend on the terms of each individual real estate contract, as well as state laws
  • Foreclosure sales and junior mortgages: In the event that a foreclosure proceeding is filed, having a junior mortgage may change the way that the proceeding runs. On the other hand, refinancing a mortgage can be one way of avoiding foreclosure
  • Negotiation can be challenging: Negotiating new contract terms can sometimes be difficult, especially for younger or inexperienced borrowers. Legal assistance may be necessary in order to avoid disputes or a loss of borrower rights

Lastly, when you refinance a mortgage, you are essentially incurring more debt. While refinancing can help you save your home, in the end you will need to deal with the additional debt. Failure to keep up with mortgage payments after adjustments can often lead to financial and legal issues.

What Is a Mortgage Lawsuit?

A mortgage lawsuit may be filed if there is any dispute at all over any mortgage issues. For instance, non-payment of monthly due amounts can lead to a lawsuit, which in turn can result in foreclosure. Or, unfair contract terms can be brought up in court, resulting in a re-writing of the mortgage terms so that they don’t violate the borrower’s rights.  In many cases, a monetary damages award may be issued to the non-violating party. 

Do I Need a Lawyer for Help Refinance a Mortgage?

If you need to learn how to refinance a mortgage, you may wish to hire a real estate lawyer for assistance. Your attorney can assist you with contract terms, negotiation, and various other aspects of mortgage refinance laws. Also, if you need to file a lawsuit regarding mortgage issues, your lawyer can represent you in court and provide you with insightful legal advice during the process.