In Canada, there are two main ways to close a mortgage refinance: through a title company or with a real estate lawyer. Although you are not required to use a real estate lawyer for mortgage refinance, there is a greater benefit to use one over a title company.
What is a Title Company?
Title companies typically act as a neutral third party between you and your lender. The two major players in Canada are FNF and FCT. Majority of the top banks and some B lenders in Canada use these two for their refinance and mortgage transfer transactions . They handle many of the tasks involved, including:
- Title Search: A title search ensures that the property you are refinancing has a clear title and no outstanding liens or encumbrances. When there are title discrepancies you and your lender will need to work together to resolve them.
- Title Insurance: Title insurance protects you from financial loss if there are any problems with the title to your property that were not discovered during the title search.
- Closing Services: Title companies typically handle the paperwork and logistics of closing a mortgage refinance. The mainly handle increasing the mortgage amounts with the same lender and if you are switching lenders. This includes collecting and disbursing funds, recording the new mortgage with the land registry office, and ensuring that all closing conditions are met.
Advantages of Using a Real Estate Lawyers
Real estate lawyers also follow the same procedure of (title searches, Title insurance and closing services)but they are also able to handle situations where the title insurance company is not able to complete the tr. Here are a few reasons to consider hiring a lawyer for your mortgage refinance:
- Legal Expertise: Real estate lawyers have the knowledge and experience to review and explain the legal documents involved in a refinance. They can also inform you of your legal rights and obligations.
- Complex Refinances: If your refinance is complex, such as if you are involved in a property co-ownership or have a lot of equity you want to cash out, a lawyer can help ensure that the process goes smoothly and that your interests are protected.
- Faster closing: Real estate lawyers can generally close in a few days. They are able to request discharges and solve title issues at a much faster pace.
- Peace of Mind: Having a lawyer represent you during your refinance can give you peace of mind knowing that someone is looking out for your best interests.
Disadvantages of Using a Title Company
- Delays: One of the biggest disadvantages of using a Title Company is that closing your transaction takes a long time. If you are in a rush to get a promotional rate or if you need funds immediately they would not be able to facilitate that.
- Limited Scope: Title companies primarily focus on title searches, insurance, and closing procedures. They do not offer the same breadth of legal advice a lawyer can provide. They cannot assist in the following situations :
- Adding someone to title
- Removing someone to title
- Private mortgage
- Property is under a Corporation
- Complex Situations: If unexpected title issues or disputes arise, a title company might not be equipped to provide the comprehensive legal support that you might need.
Disadvantages of Using a Real Estate Lawyer
The main disadvantage of using a real estate lawyer for your mortgage refinance is the cost. However, in some cases, the peace of mind, protection and the faster timelines that a lawyer can provide may be worth the cost.
Deciding Whether to Use a Real Estate Lawyer
The decision of whether or not to use a real estate lawyer for your mortgage refinance is a personal one. If you are comfortable with the process, the time line and do not have any complex legal or title issues, then using a title company may be sufficient. However, if you want the peace of mind of having a lawyer represent you, or if your refinance is complex, then hiring a lawyer is a good option.
Here are some additional factors to consider when making your decision:
- The complexity of your refinance
- Your comfort level with legal matters
- Your budget
At KN Law, we understand that refinancing your mortgage can be a complex process. Our experienced team is dedicated to providing you with personalized guidance and comprehensive legal support every step of the way. From deciphering complex contracts to advocating for your interests, we’re committed to making your refinance experience as seamless and stress-free as possible.
Ready to experience the KN Law difference?
Give us a call at 647-350-1250 or email us at info@knlegalservices.com today to schedule a consultation and discuss how we can help you achieve your refinancing goals.
