Purchase vs. Refinance Auctions: Which One Should You Run?

HomeTurf runs a few different kinds of mortgage auctions, and the two most common are the purchase auction and the refinance auction. They work the same way at a high level: you post what you need, verified lenders compete, and you choose the winner. The difference is what you are trying to do with the loan. Here is how to tell which one fits your situation.

Start a purchase auction when you are buying a home

A purchase auction is for financing a home you are buying. It fits whether you are early in your search or already have an accepted offer. You describe the property or the price range you are targeting and the kind of loan you want, and lenders come back with competing terms for that purchase.

This is the right choice when:

• You are shopping for a home and want to know what financing looks like before you commit.
• You have an accepted offer and need to line up your loan.
• You want to compare several lenders at once instead of calling them one by one.

Start a refinance auction when you already own the home

A refinance auction is for replacing the loan on a home you already own. People refinance for different reasons, such as changing the length of the loan, moving from an adjustable rate to a fixed rate, or adjusting their monthly payment structure. In a refinance auction you describe your current loan and what you want to change, and lenders compete to win the new loan.

This is the right choice when:

• You already own the home and want to replace the existing mortgage.
• You are weighing a change in loan term or rate type.
• You want to see what several lenders would offer without tipping off the whole market.

What both auctions have in common

No matter which one you run, the ground rules are the same. Every lender is verified against the Nationwide Multistate Licensing System before they can bid. Lenders cannot pay for placement, so the offers you see reflect their actual terms. You stay anonymous until you select a winner, so you will not get a wave of calls the moment you start. And you are the one who chooses the winning offer.

How to decide in one question

Ask yourself: am I financing a home I am buying, or replacing the loan on a home I already own? If you are buying, run a purchase auction. If you already own it, run a refinance auction. If you are not sure yet because you are still house hunting, a pre-approval auction may be a better first step, and we cover that in a separate guide.

When you are ready, you can Start Your Auction and let verified lenders compete for your loan. HomeTurf is free for borrowers and is now in beta.

HomeTurf is a technology marketplace, not a lender or loan originator. This content is for general information only and is not financial or legal advice. Now in beta.