There are essentially two ways to get a mortgage. The first being a “purchase money mortgage” that is obtained when buying a property; having an attorney representation is highly recommended. The second situation is a “refinance mortgage” that is obtained when you already own the property and are taking equity out of your home or obtaining a better rate or term. In our opinion, having an attorney in this situation is not necessary.
The thought process is that in a purchase transaction there is a transfer of ownership and ensuring clean adequate title is necessary and a function of the buyer’s attorney. In a refinance, title has already been conveyed so there is no risk of obtaining bad title. An exception to that would be a refinance where someone was buying out a former spouse or siblings were refinancing a family owned property. In those cases, title is changing hands, and an attorney should ensure that transfer is done properly.
The bigger question, unfortunately given little thought is: “What attorney?” Attorneys, much like doctors, specialize in specific fields. All too often I see the “family attorney” get involved in the mortgage transaction and while, it’s not rocket science, there are nuances to real estate law that if not properly practiced, can unnecessarily delay a closing. For example: Many non-real estate attorneys do not order the survey and abstract until after the commitment is issued. This past summer, surveys had a 3-week turn time, unnecessarily delaying many closings. In addition, TRID, a new federal mandate was recently enacted. Timely disclosure of closing figures to both buyer and seller at specific times in the transaction is now mandatory and requires a high level coordination and detailed understanding of the new rules.
Rochester, Buffalo, Syracuse and the surrounding counties, have dozens of attorneys who specialize in real estate law. Ask your real estate agent or your loan officer for a referral to a knowledgeable practiced real estate attorney that they have worked with in the past; it will give you a better chance of closing on time with a minimum of stress.