What is the difference between a purchase and a refinance in Mortgages

Purchase is when you are buying the property from a seller, and often you will need an attorney to represent you. A refinance is when you already own the home, and you are refinancing the mortgage on the home for either better rate and term, or looking to take equity out of the home, you do not need an attorney for the refinance.

Pretty straight forward actually. A purchase mortgage is something u would get when u want to buy a property. A refinance can occur when u currently own a property & want any or all of the following:
* Take some equity out in cash for other projects/things u want such as remodeling, etc.
* The current mortgage interest rate is higher than u can get by refinancing. This usually occurs when interest rates go down by at least 1 percent. You might want to refinance without taking money out & just reducing ur monthly payment.
*For whatever reason, u got behind on ur payments & want to get got up without having to come out of pocket.

Before u would refinance a mortgage, be sure of all the fees. Even if u do not come out of pocket with money, there will be fees associated with the transaction which will alter the amount of equity u have.

Hope that helps.

With a refinance, you already own the property and have a mortgage on that property. You just want to either lower your rate, adjust your term, or cash some of the equity out. With a purchase, the mortgage you are trying to obtain is new, and your first on the property. As far as terms of the loan, the interest rate, amortization, etc. are the same for both a purchase and a refinance.

Hope this helps.

With the purchase it is the first time buying and financing. When you refinance is financing it again for a different rate, payment. It is like buying your house all over again, before you paid it off.

A purchase mortgage is used when you are transacting the purchase of a home. A refinance is used to replace the mortgage that was used when the home was purchased or was previously refinanced.