How do refinance mortgages differ from home purchase morgages?

Asked by Trulia Phoenix, Phoenix, AZ Thu Feb 21, 2013

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BParker, CPA*’s answer
BParker, CPA*, , Scottsdale, AZ
Sat Feb 23, 2013
Hi Trulia:

Couple questions back at you.

Are you asking about the legal aspects, as David started to address, or, are you asking about the process? Unlike David, I think it varies more, as a purchase usually has a more stringent timeline; with a refinance we get to pick the title company so have more control over quality of work received; with a purchase there are usually at least two realtors involved, and their idiosyncrasies; fewer people to keep updated with a refinance; purchase borrowers may or may not have ever gone through the home financing process before, so may take more time to educate (which can be quite fun); first-time homebuyers bring a whole new sense of wonder and appreciation when the job is done well; etc., etc. Each of these could be discussed in more depth, but...

The other question is: You seem to ask quite a few of these questions. As I sit here on a Saturday morning, working on loans and my borrowers' needs, being a businessperson I have to consider the best use of my time. I don't mind answering "real" borrower questions, as I believe that is the purpose of this site, but I am less sure about why I should spend my time answering made-up questions...Am I helping you prepare an article, for which I might get partial credit? Do I get "bonus points" and better exposure on Trulia? Please help me, and others, understand why you ask so many questions and of what value they are to us and the general public.

Thanks. Bill.
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Hi Bill,

Thanks for the question. We are posting questions in Trulia Voices, as people often tend to type these types of questions straight into their favorite search engine, and click on the first search result. We want to make sure that your expertise is being seen by as many people as possible, and so we want these posts to be that first search result that a home buyer would click on. We're trying to get home buyers and sellers the answers they need faster, and get you the exposure you're looking for.

Thanks again for your time and for your contributions to our community.
Flag Wed Apr 3, 2013
David Rider, , Phoenix, AZ
Thu Feb 21, 2013
From a lender's perspective the process is not much different between the two. However, from a legal view point there is a major difference.

A "Purchase Money" Mortgage in the state of AZ gives you certain protections in the case of a foreclosure, providing that the property meets certain requirements.

A refinance may or may not give you the same protection against judgments in the case of a foreclosure depending if you took "Cash Out" of your property and did not reinvest it to improve the property.

David Rider (NMLS 200787)
CMG Mortgage
Please see my website for legal information.
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