Home Refinancing

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 lines that may appear.

Assuming all these items meet with the lender's approval, the loan will be approved.

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.