If you are closing your mortgage refinance, you’ll likely be required to use a lawyer or a title company to close your new mortgage.
Refinancing a mortgage means paying off an existing loan (mortgage) and replacing it with a new one. In most scenarios, your new lender may be a different institution than the one that holds your current mortgage and part of the amount you borrow may be used to pay off your existing loan to your current lender.
Closing mortgage refinance delays are not uncommon and are caused by a variety of factors. There are, however, multiple things you can do to ensure your mortgage refinance closing happens seamlessly and on time.
Here are some of them:
Have valid government photo ID
Since the beginning of the pandemic, many Canadians have not had the opportunity to renew their drivers’ license or passports.
While there has been a grace period during the pandemic, a valid government-issued photo ID is required. If you are planning to close on a property or a mortgage, an expired drivers’ license or passport will not be accepted.
Ensure you provide updated debt statements
If you are refinancing to consolidate debt, your lender may require your lawyer or title company to pay off your debtors out of the proceeds of your refinance. For your debtors to be paid and to avoid accumulating additional interest, you will likely be asked for the latest statements for each debt.
If you’ve already provided these statements to your mortgage agent or bank, you may be wondering why you may need to resubmit them again. Occasionally the mortgage application to approval process may take weeks. If a statement is out-of-date, the balances to be paid may be incorrect. Therefore, you may need to obtain statements again for the purpose of closing.
Statements must contain key items such as your name, your account number, and your most recent balance to be processed. Most statements can be obtained online through online banking or by calling the company. It may be a tedious process, but the quicker you can obtain the statements, the quicker your refinance can close and the impact of consolidating debt takes effect.
Provide your lender with lawyer’s information
Your lender will require your lawyer’s information to send mortgage instruction to the lawyer’s office. In most cases, this information will be required when you sign your new mortgage commitment. Delaying providing your lawyer’s coordinates and contact information to your lender may delay your closing.
Schedule closing off peak
Real Estate and Mortgage transactions peak from April through September and because purchases and sales have a firm deadline, chances are your refinance closing may get delayed. If possible, choosing a closing date in the beginning or the month will increase the chances of your mortgage refinance closing on time.
Close virtually
Virtual closing is now an option in most Canadian provinces. Quite simply, it means that you can sign your closing documents from the comfort of your home, without having to go into a lawyer’s or notary’s office.
A virtual closing isn’t only a convenient option, but when it comes to accelerating the closing of your mortgage, it eliminates a lot of the back-and-forth scheduling and time constraints required to book an appointment.
When you use Deeded, we connect you with one of our friendly and experienced, independent real estate lawyers who use our virtual closing experience. Closings can be completed in the evenings and even on weekends.
Mortgage Refinancing FAQ
1. Is a Real Estate Lawyer Necessary for Refinancing?
While hiring a real estate lawyer isn't mandatory, it can be highly beneficial. After your refinancing is approved, a lawyer ensures all legal requirements are met, such as reviewing documents and ensuring everything is in compliance with regulations. At Deeded, we work with experienced professionals to make your refinancing process clear and hassle-free. Learn more about the role of a lawyer in refinancing.
2. Where Should I Refinance My Mortgage?
You have the option to refinance with your current lender or explore other options for better terms and rates. Many homeowners choose to switch lenders for more favorable refinancing conditions. Deeded simplifies the process by guiding you through the steps and connecting you with professionals who help manage every detail, whether you stay with your current lender or go with a new one.
3. Why Should I Consider Refinancing My Mortgage?
Refinancing can offer many advantages, such as securing a lower interest rate, reducing monthly payments, or accessing home equity for renovations or debt consolidation. It’s also a good way to change your loan’s terms to better suit your current financial situation. Refinancing can be a powerful financial tool when used effectively. Explore the benefits of refinancing here.
4. What Are the Costs Associated with Refinancing?
The cost of refinancing can vary depending on factors like lender fees, legal expenses, and potential penalties for early mortgage repayment. However, choosing a service like Deeded can help streamline the process and reduce unnecessary costs. For a better understanding of these costs, visit our blog to explore more on refinancing closing fees.
5. What Documents Are Required to Refinance My Mortgage?
To refinance, you’ll need several key documents, including your current mortgage statement, statements for any debts being paid off through refinancing, proof of updated home insurance, a recent property tax statement, and a void cheque. Gathering these ahead of time will ensure your refinancing process goes smoothly and efficiently.
6. How Long Does the Refinancing Process Take?
Refinancing typically takes between 5 and 7 business days, depending on the complexity of your situation and the promptness of document submission. At Deeded, we strive to keep everything on track and ensure the process is as quick and seamless as possible while keeping you informed at every step.
7. Can I Refinance with Poor Credit?
It’s possible to refinance with a less-than-ideal credit score, although it may come with higher interest rates and less favorable terms. Many lenders specialize in offering refinancing options for people with low credit scores. If you’re concerned about your credit, consulting a mortgage broker can help you find the best refinancing options tailored to your financial needs.
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