Judgments that are still open are on public record and usually show up on your credit report. They definitely show up when a title search is completed. Since a judgment can be a lien (or the threat of a lien) against your property, .it sits in second position behind your first mortgage, making it the same as a junior lien, or second mortgage. If the first mortgage is paid off, then the judgment moves to first place position. It is for this reason that most lenders will require the judgment to be paid off in a refinance if there is enough equity to do so.
Refinancing a Mortgage With a Judgment
Discuss the judgment with your lender. The lender will be able to tell you what value you must have in your home to pay off the mortgage balance, judgment balance and closing costs. Begin your loan process with the lender who will order an appraisal on your home to prove its value.
Contact the company that holds the judgment to get either a satisfaction letter if the judgment is in error or the correct amount to pay off the judgment.
Follow up with your lender and supply updated documents as requested.
When you are clear to close, the lender will schedule closing with the title agent. Request a copy of the closing statement before closing, and have lender go over closing figures with you. Ask questions about anything you don't understand.
At the closing, ask questions about anything you don't understand. Sign and date documents as agent requests. You are officially closed on your refinance, but the funds for payoffs will not be sent out for three business days
