I can’t quite wrap my head around this so anything will be appreciated.
So if a company ‘buys’ a property for me with the expectation of me paying it back, when I switch mortgage companies, does the new company pay off the debt to the old company? How does it transfer over?
In: 13
Yes, a new mortgage lender pays off the balance of the loan with the previous mortgage lender. And you now owe the balance to the new lender.
As far as the old lender is concerned, having a mortgage paid off because of refinancing is no different from a mortgage being paid off due to a house being sold. Mortgages very commonly get paid off before the loan matures (typically 15 or 30 years) for a variety of factors like a house being sold, owner death, refinancing.
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