Refinancing Basics: What You Need to Know Before Closing
Are you considering refinancing your home? With the current relatively low mortgage interest rates, now may be the perfect time to refinance your home. Before you decide whether to refinance or not, there are some things you should consider. Here are a few basics to know before closing on your refinance:
Your “payoff amount” is always higher than your remaining principal balance.
Your balance is the amount of remaining principal owed. Your payoff amount is the balance plus prorated interest from the last payment received until the loan is actually paid off.
The funding date is usually different from the closing date.
The government mandates a three-day rescission period for refinances of primary residences. Loan payoffs will not occur until the fourth business day post-closing. This will affect the payoff amount, the final payment date and the release of any cash.
Do you actually get to skip a payment?
It seems that way because your first regular payment is usually not due until the second month after closing. The reality is that while you do get a break on paying principal for the closing month, between the old and new loans, you are still paying a full month's interest.
Don't count on your existing escrow funds for closing.
If you have an escrow account for taxes and/or insurance, these funds will be held there until the current loan is paid off. Accordingly, unless funds for taxes due and/or a new escrow account are covered by the new loan, be prepared to advance this money at closing. It will typically take several weeks before your current escrow account funds are returned to you, so it pays to plan ahead.
Refinancing your home can save you money in the future and help you to achieve your financial goals. If you have any questions about refinancing your home at the Lake of the Ozarks, feel free to contact us! MHQ Mortgage HeadQuarters are your mortgage professionals at the Lake of the Ozarks and would be happy to assist you in refinancing your home.
Mortgage Headquarters of Missouri, Inc
4824 Osage Beach Parkway, Suite 1
Osage Beach, MO 65065
Office: (573) 302-9990
Toll Free: (888)799-1206
Fax: (636)648-9917
Email: info@mhqmortgage.com
NMLS # 1229111
Your “payoff amount” is always higher than your remaining principal balance.
Your balance is the amount of remaining principal owed. Your payoff amount is the balance plus prorated interest from the last payment received until the loan is actually paid off.
The funding date is usually different from the closing date.
The government mandates a three-day rescission period for refinances of primary residences. Loan payoffs will not occur until the fourth business day post-closing. This will affect the payoff amount, the final payment date and the release of any cash.
Do you actually get to skip a payment?
It seems that way because your first regular payment is usually not due until the second month after closing. The reality is that while you do get a break on paying principal for the closing month, between the old and new loans, you are still paying a full month's interest.Don't count on your existing escrow funds for closing.
If you have an escrow account for taxes and/or insurance, these funds will be held there until the current loan is paid off. Accordingly, unless funds for taxes due and/or a new escrow account are covered by the new loan, be prepared to advance this money at closing. It will typically take several weeks before your current escrow account funds are returned to you, so it pays to plan ahead.
Refinancing your home can save you money in the future and help you to achieve your financial goals. If you have any questions about refinancing your home at the Lake of the Ozarks, feel free to contact us! MHQ Mortgage HeadQuarters are your mortgage professionals at the Lake of the Ozarks and would be happy to assist you in refinancing your home.
4824 Osage Beach Parkway, Suite 1
Osage Beach, MO 65065
Office: (573) 302-9990
Toll Free: (888)799-1206
Fax: (636)648-9917
Email: info@mhqmortgage.com
NMLS # 1229111
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