(NC)—Low interest rates coupled with the introduction of the Home Renovation Tax Credit make home renovations an attractive option. This credit can be claimed on your 2009 income tax return, for eligible expenses for work performed or goods purchased after January 27, 2009 and before February 1, 2010. The credit applies to eligible expenses of more than $1,000 but not more that $10,000, with the maximum credit available being $1,350.

If you're planning to refinance and use the mortgage proceeds to fund the renovation, you need to understand the fine print in the legal documents you're signing – and the financial obligations and legal consequences of not meeting those obligations. That's where an experienced real estate lawyer can help.

“Before signing any mortgage refinancing documents, understand and review all paperwork involved: The returns might not add up if you encounter unexpected financial obligations or penalty clauses along the way”, says Ray Leclair, an experienced real estate lawyer and vice-president of TitlePLUS.

Leclair explains that a trusted advisor protects homeowners' interests, in terms of:

• the specifics of the loan transaction;
• the security given to the bank in exchange for borrowing the money;
• the lender's Standard Charge Terms (including what the lender can do if payments are not made on time);
• a confirmation of which property and obligations are being secured with the loan;
• terms of the renovation contract, including your rights if there is sloppy work or delays in the construction; and
• the possible consequences of a dispute with contractors, including their right to put a lien against your home for unpaid work.

“Working with a real estate lawyer when you refinance ensures that you are fully aware of all issues and your new obligations,” says Leclair. “Protect your interests, and take advantage of the new renovation tax credit, by working with a trusted advisor, such as a real estate lawyer.”

A useful resource is the TitlePLUS Real Simple Real Estate Guide, a website that provides information on what lawyers do and how to avoid fraud, as well as mortgage calculators, a locate-a-lawyer feature and other tools. It is available free at www.titleplus.ca.

For full information on eligibility and calculation of the Home Renovation Tax Credit, go to the Canada Revenue Agency website.