What You Should Know About Refinancing In New Jersey
“Refinancing” is a term often used with residential real estate. As an established real estate firm in New Jersey, our team is here to answer your questions. Read on or contact us today for more information.
What is refinancing?
If you own a home, you can replace your existing loan with a new, lower-rate loan. This can lower your mortgage payments or help you obtain equity in cash. If you are interested in refinancing, your lender probably offers home equity loans or second mortgages. Before you choose to refinance, you should discuss your options with your attorney to avoid potential liens.
Should I let my lender refinance my home through their title company instead of working with my attorney?
Often, lenders try to persuade borrowers that they can obtain lower closing costs by working with an affiliated title company or another entity. But these companies typically offer lower closing costs by charging higher fees and adding on incidental charges to your total. Your lender cannot force you to use their title company. Instead, you should always have an independent attorney to look out for your best interests, especially against the powerful counsel of large lending companies.
Will I have to buy title insurance a second time?
Yes, since each title insurance policy is specific to a certain mortgage. If you take out a second mortgage, you will need to purchase title insurance specific to it.
Will I have to buy homeowner’s insurance a second time?
Not necessarily. You will need to inform your insurer of your refinancing. Then, you can add your new lender’s name and mailing address to your homeowner’s policy and obtain proof of insurance.
Should I get another survey?
In most instances, you can use the survey that you requested when you purchased the property as long as you can provide the original survey and a seal from the surveyor. However, if you made any major improvements such as a deck or garage to your home, it may be necessary to get a second survey. If you have not made any major improvements, then you can sign an affidavit of no change and use the existing survey.
Should I get a certificate of occupancy? What about a smoke detector certification?
You only need these certifications when you are selling the property or renting it to a tenant.
What will happen to my existing mortgage?
Our office will have you pay off the remaining mortgage when you refinance.
Will I have another closing day for my refinance?
Yes, refinances require you to execute the new documents for your loan. The process is similar to what you went through on your closing day for the initial purchase. In New Jersey, there is a period in which you can cancel the refinance up to three days after your closing day. However, once this period is up, the funds will be disbursed.
How will I know my closing costs and what to bring to the closing?
Within 10 days of your application for refinancing, your lender must provide a good-faith estimate of your closing costs. This figure may not be completely accurate, but it will give you a good idea of the amount of money you will need on your closing day. Your lender can give you the exact figure within 24 hours of your closing. You will receive a document called a HUD-1 or a RESPA statement that you can review with your lawyer prior to closing.