Comments on: Mortgage Refinance: Closing Process Explained

By: suzanne lustgarten

suzanne lustgarten — Thu, 29 Oct 2009 15:06:02 +0000

confused on interest due on estimated closing statement

On my estimated closing statement which was due to close 10/26
they charged me interest on old loan 10/1 to 11/1 (interest for whole month)
even though I made october 1 payment on old loan which I know pays interest for september. The interest i am charged on new loan is 10/26 thru 10/31.
So on old loan shouldn't i just be charged 10/1 thru 10/26?

1.On old loan aren't you just charged interest up until the date the loan funds?

2. Is it normal procedure on a closing statement to make the borrower pay a full month interest on the old loan for the month the loan closes? Do you get a credit back when they receive funds paying off old loan since you paid interest for the whole month on old loan at closing?

By: TFB

TFB — Sat, 10 Oct 2009 16:52:17 +0000

Shirley - If I have a choice, I would prefer to close it in a local settlement agent's office and face a real settlement agent. A traveling notary can make some explanation but they don't know all the answers. See my experience in Mortgage Refinance Completed.

By: Shirley Siegrist

Shirley Siegrist — Sat, 10 Oct 2009 16:40:31 +0000

What do you think of closing on a refinance by notary? Lender said they will send a notary to the house. Who is responsible to explain the terms and legalities of the forms signed? Somehow it does not seem like the best practice.

By: Danny

Danny — Thu, 02 Jul 2009 18:41:14 +0000

My situation is this: I closed 6/23, funds were suppose to disburse 6/30 and for some reason they are delaying. What is my recourse?

By: ManInTrouble

ManInTrouble — Thu, 18 Jun 2009 22:11:14 +0000

I finally got the issue resolved, but it ain't easy.

I asked the settlement agent about the overlap interest – no response at all. I escalated the issue to the branch manager. She said she needed some time to investigate. Three weeks later, she still could not provide the details of the closing date to explain the excessive overlap interest. I finally have to talk to the regional manager to get it resolved. No details was given, but they offered me a refund check.

Once again, I want to thank you for your comments and support. Double thumbs-up for the refinancing event calendar.
Bravo!

By: TFB

TFB — Sat, 06 Jun 2009 07:29:09 +0000

@ManInTrouble – (1) Yes, because typically the loan is funded the day before the closing date. (2) You should ask your settlement agent how and when they did your payoff. If they sent a wire, your old lender should've received it on Tuesday 5/12. If they FedEx'd a check, your old lender should've received it on Wednesday 5/13. If your settlement agent didn't send payoff on time, they should pay you the extra interest. I had this happen to me once. I complained to the settlement agent. They paid me the extra interest because they caused the delay. On the other hand, if your settlement agent did the payoff on time, you should get the wire or FedEx tracking number and complain to your old lender for crediting you too late.

By: ManInTrouble

ManInTrouble — Mon, 18 May 2009 22:55:36 +0000

I have just refinanced my loan. The paper was signed on 5/6/09 (Wednesday). According to the final closing statement, I start paying interest to the new lender on 5/11/09 (Monday). The closing date is 5/12/2009 (Tuesday). But when I contacted the old lender, I was told that they received the funding on 5/15/2009 (Friday) and therefore, they charged me interest for 14 days.

I understand that it's typical to pay 1 or 2 days of overlap interest during refinance. But 4 days of overlap interest seems unusual (especially when the closing date falls on a Tuesday).

Questions are:
1. If the closing date on the statement is 5/12, should I pay the interest for 5/11?
2. What could have caused the delay between 5/12 and 5/15? Any ideas?

By: TFB

TFB — Tue, 04 Mar 2008 06:38:00 +0000

When I sign my documents, I will ask them about paying off the old loan by wire.

I hope you got a good rate too!

By: indexfundfan

indexfundfan — Mon, 03 Mar 2008 23:04:00 +0000

Thanks. I am asking all these questions because my refi will close on a Thursday. Also, this is the first time I am not doing a refi with the same lender.

I think a wire was used for my last refi, but I could be wrong.

By: TFB

TFB — Mon, 03 Mar 2008 22:40:00 +0000

I don't know the answer to the first question. All my refi's are done at the same escrow company and they always used FedEx. I'm interested in hearing what others' experience is.

Thursday is also a good day, just not as good as Tuesday or Wednesday. If you sign the docs on Thursday, you have a 1-day cushion for any delay. Tuesday and Wednesday have a cushion for 2 days. In the order of preference, it is

Tue/Wed > Thu > Fri >> Mon