Release of new loan funds to pay off the existing mortgage and complete a refinance.
Refinance funding is the release of new loan funds to pay off the existing mortgage and complete the refinance.
Refinance funding matters because the refinance is not complete just because the borrower signs documents. The new loan must fund, the existing mortgage must be paid off, and any cash-to-close or proceeds must be handled.
It also matters because timing can affect payoff interest, escrow handling, and when the borrower should start following the new payment schedule.
Borrowers encounter refinance funding at the end of the refinance process, after underwriting, closing documents, and any required post-signing steps.
The term becomes practical when the borrower wants to know the Refinance Funding Date, when the old loan will be paid off, when cash-out proceeds will be available, and when the new mortgage actually becomes active.
| Funding action | Why it matters |
|---|---|
| Pay off the old mortgage | Replaces the existing loan with the new one through Old Loan Payoff |
| Pay transaction charges | Completes settlement of refinance costs |
| Disburse eligible proceeds | Sends cash-out funds when the transaction allows them |
| Set the new payment path | Starts the borrower’s responsibility under the new loan |
A borrower signs refinance documents. After the required closing steps are satisfied, the new loan funds, the old mortgage is paid off, and the refinance becomes the active mortgage.
Refinance funding differs from Funding because it is the refinance-specific release of funds to replace an existing mortgage.
It differs from Refinance Closing Disclosure because the disclosure shows final terms and costs, while funding completes the money movement.
It also differs from Refinance Disbursement. Funding releases the money; disbursement allocates the money to payoff, costs, escrow items, and any borrower proceeds.
It also differs from Refinance Recording because funding releases loan money, while recording documents the new lien in public records.