A purchase mortgage is the funding used to finance the original purchase of a home.
Refinances, on the other hand, allow homeowners to make changes to their existing mortgage rates.
The purchase mortgage is what allows someone to become a homeowner without having enough cash on hand. You cannot refinance without first having a mortgage.
Purchase mortgages may have higher interest rates because there are more ancillary fees associated with them.
Refinances empower you to change the terms of your original mortgage.
If interest rates are lower today than they were when you obtained your original loan, you might refinance to take advantage of the lower rate.
