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When an owner obtains a new first mortgage on his
real estate, the homeowner has undergone a
home refinancing. Simply put, think of home
refinancing as trading in an old first mortgage for a new
first mortgage.
To
refinance a home, the homeowner must apply for a new
mortgage. During the application process, the subject home will
undergo a new appraisal to determine its value, and the
homeowner's credit file will be reviewed. The lender will also
order a title report on the property to search for any other
liens that may appear. Assuming all these items meet with the
lender's approval, the loan will be approved by the lender.
Once approved, the homeowner will meet
typically at the office of the lender or title company to sign
the new mortgage. The proceeds of the new loan will be used to
pay off the old first mortgage as well as any additional
mortgages and liens on the property. Accordingly, the only
mortgage showing on the
home after the refinance will be the new loan itself. |
