Mortgage Refinance: Before and After Closing

After an appraisal is done, an underwriter will review the documents. Chances are the loan will be approved and I will be asked to pick a date for closing. It’s almost done.

Pick the Best Day of the Week for Closing

Does it make a difference which day you close the refi besides the convenience factor? Yes, for a refinance on your primary residence from a different lender, the short answer is:

Tuesday/Wednesday > Thursday > Friday >> Monday

I wrote about the reasons two and half years ago in Mortgage Refinance: Closing Process Explained. It has to do with how the calendar works with the 3-day rescission period.

Double Check the HUD-1

The Settlement Statement is on a government mandated form called HUD-1. It shows how much money I’m asked to bring to the closing and how that money will be used in conjunction with my new loan. There are many numbers on the HUD-1. Some are more important than others. I note here what I double check.

Lender fees are in 800 lines. Title insurance, settlement fees, and government recording fees are in 1100 and 1200 lines. I make sure these fees match what I agreed to in the Good Faith Estimate (GFE). If I paid for the appraisal separately already, I make sure it’s marked as POC – paid outside of closing – and I’m not charged again on the HUD-1. If I paid a deposit, I make sure it’s credited back on HUD-1.

Prepaid interest, tax, homeowners insurance, and escrow deposits are in 900 and 1000 lines. I don’t worry too much about these.

Get the Cashier’s Check

I got caught off guard once before. Now I learned to transfer money to a local bank account ahead of time. I may get away with giving a personal check, but it’s always safer to have enough money locally for a cashier’s check.

What to File and What to Shred

I sign many documents at closing but I don’t keep all of them. I only keep:

  • The note – my promise to pay
  • The security instrument – my pledge of my home as collateral for the loan
  • HUD-1 – I keep it for tax records
  • First payment coupon – I keep it until I receive the welcome package from the new lender

Everything else goes to the shredder.

Confirm Payoff and Escrow Deposit

I circle two numbers on the HUD-1: Line 104 is the payoff amount for the old loan; Line 1001 is the initial escrow deposit for the new loan.

After the expected funding date, I will check online to see when the payoff to the old loan is credited and whether the payoff amount matches line 104 on the HUD-1. It usually includes a few extra days of interest. I will get a refund for it from the old lender in a few weeks together with my escrow balance.

After I set up online access for the new loan, I will confirm they credited me the correct escrow deposit amount as shown on line 1001 on the HUD-1.

I never had problems with these amounts. It’s just an old habit: trust but verify. However, if the settlement agent paid off my old loan late, I will ask them to reimburse me for the extra interest I incurred.

This is part of a "How to Refinance" series of posts. Other posts in the series include:

Refinance Your Mortgage

Mortgage rates hit new lows. I saw rates as low as 3.25% for 30-year fixed, 2.625% for 15-year fixed, with no points and low closing cost. Check mortgage rates in your state.


  1. bill says

    You have written extensively on re-financing and as a result I have locked in on a re-fi with the promise to float me down if the rates drop. What is a reliable way to monitor interest rates on a daily or weekly basis?

  2. Harry Sit says

    bill – I hope you are doing it with a lender that quotes rate and fees online. Then you just get a new quote from them daily if you’d like. Otherwise you can use AmeriSave for rate watching. They update rates and fees multiple times a day. The bank I used – First IB – offers daily rate watch emails.

  3. thefinancebuffReader says

    “I got caught off guard once before. Now I learned to transfer money to a local bank account ahead of time. I may get away with giving a personal check, but it’s always safer to have enough money locally for a cashier’s check.”

    I just read your old thread. I too had issues with Wells Fargo bank. This was for a down payment on a house. The amount was much too large to use an ATM or credit card. I can’t remember the exact details, I think my plan was to wire the money. On the day to wire the money, they informed me that I had to go to a branch to sign some papers. The problem was that I lived 6 hours away from a Wells Fargo bank.

    I inquired about using a local Wachovia branch, a bank they had recently bought out. They said no, they hadn’t integrated with them. I inquired about Wells Fargo Mortgage. My mortgage wasn’t with Wells Fargo, but Wells Fargo had local mortgage brick and mortars in the area. They said no again. They refused to do anything to help.

    Fortunately, the closing company accepted my personal check,

    I am still bitter about the experience. I have stuck with Wells Fargo only because there are no comparable brokerage options.

    Moral of the story, as tfb says, “transfer money to a local bank account ahead of time”.

  4. Rachel says

    Sounds like an awful experience all around — just another way to misstep in this already tricky, taxing process.

  5. Mary Ann says

    I am refinancing my current loan that I refinanced in 2008. What is bothering me the the release fees. In 2008 Bank A held my loan in the payoff statement I was charged $30 recording fees. in the statement they said they would send the release to the court. However on my HUD 1 I was charged $60 to process a release payable to the settlement agency that is owned by the credit union in which my new loan is with. I am now refinancing again and again I am being charged $60 to process a release. What bothers me is that it is the mortgage company who is responsible for ensuring the release of the lien is done. Why am I being charged by the settlement company? I believe the payoff will again collect the recording fees.

  6. Harry Sit says

    @Mary Ann – Unfortunately they do charge two recording fees. One fee is for the settlement company to record your new mortgage. The other fee is for your old lender to record the release of your old mortgage. The old lender also often charges a $30 fee for just generating a payoff statement.

  7. melvin rosen says

    We received a GFE for a home refi and signed an Acknowledgment of Receipt of GFE on 1/26/2012 at an interest rate of 3.875% and Credit of $10,870.00 for 30 year loan term. I then got a rate lock for 30 days on Jan 29, 2012 ending on Feb 28,2012 for the same terms. On Feb 14 I received an email from my Broker stating that the Loan was approved and to send four docs which I did the same day. A HUD-1 was generated for the agreed terms on or about Feb14-15 with settlement date 2/17/12 and funding date 2/23/12. The title company also issued a Borrower Estimated Closing home owner’s insurance company and Mortgage company of the new mortgage. Later in the month of Feb I was notified by Broker tha loan could not fund within Lock period and that he had to extend the Lock to March 5.. I requested a HUD-1 to be delivered the day before settlement. To my surprise I got two HUD-1s: the aforementioned HUd-1 and a revised HUD-1 with my Credit reduced toreduced to $8,152.50. I never received a revised GFE and I think that at leasst on two counts I am entitled to a remedy for the difference in credit. In the first place since I never received a revised GFE even at settlement there is a tolerance violation in line 802. Secondly the loan should have closed soon aft initialer the initial HUD-1 as ant requested additional DOCs were trivial and delivered promptly. and that the HUD-1 should not have been withheld from me,

  8. Angela says

    I came across your website and would like to know what you think of this refinace situation I had to deal with. I made arrangements with the lender to close at the end of the month to avoid paying the month of interest. I closed with the lender on Thursday September 27th. The lender assured me that the payoff would be made by the deadline on August 1st. My payoff statement states the payoff was to be made no later than August 1st by 4:30PM eastern standard time. I got a call on Friday August 3rd from the Tiago Title company stating that my payoff was not received by my old lender and now they are charging interest for the month. He told me I needed to sign a document stating that it was Ok to use my escrow money to pay for the interest. He mentioned that If I did not sign over the note within 2 hours that the wire would be sent back and my loan would default with interest each day. I had no choice but to sent a note. I investigated further and got evidence from my old lender that the payoff went through on Thursday August 2nd and not on August 1st. Tiago Title company sent me an email with the wire transacation sent at 1:45PM Mountain Time on Monday August 1st. The wire was sent late by Tiago Title company. In the end the lender will not pay me the escrow back stating no law was broken and that it was the Title companys fault for sending the wire late. I tried getting my money back from Tiago Title company but they think it was legit for me to have to pay the interest for their mistake. Is there anything else I can do? I am considering legal action. Your help is greatly appreciated.

  9. Angela says

    I just sent in a request for you to look at my refiance situation. Tiago Title company made me hand over my escrow due to their mistake. Here are the correct dates.

    Closed on Thursday July 26th
    Deadline for payoff August 1st
    Payoff was not received until August 2nd

  10. Harry Sit says

    Angela – Conventional loans calculate interest by the day. Paying off later by one day just costs one day worth of interest. If this is a FHA loan which charges a full month of interest if you miss it by one day and you knew the rule, I’m sorry to say you were cutting it too close. It’s normal for a title company to process the payoff within 2 business days after receiving the funds from the new lender. You only gave them 1 day. Next time close on the 20th and give everybody more time.

  11. angela says

    I was one of those people that was not educated in this process. My lender guaranteed me that the deal would go through with no problems. I depended on my lender to get this done on time by the deadline. This was a FHA Loan and I did not know any rules to the loan process until I came across your website. I am sure there are plenty of people out there like me that are not experts in this area. It is sad that people take advantage of others. I will be sure to pass this knowlegde on to other people that I know.

  12. Cecilia says


    My refinance lender requested three payoff statements within the last 60 days from my current mortgage company. Can the new lender do that as many times and whenever, my mortgage company has charged me all three times.


  13. Harry says

    Cecilia – It happened to me once. I called the old lender and they reversed the charge for the extra payoff statement.

  14. Greg9 says

    I completed a refinance to a lower rate and signed docs on Thursday Nov 29th. My lender called me on Thursday Dec 6th and said my payoff came up short and I needed to wire them $1000 or make a payment to my previous lender. Can they do this after I have signed all the docs?

  15. Harry says

    Greg9 – Not sure why it’s short but if it’s really short, yes, they can do this. Did you make your mortgage payment due on Dec. 1? Maybe the payoff was assuming that you would make it but you didn’t.

  16. Chris says

    We refinanced and escrow said they recorded on 11/21. Because the following 2 days were the Thanksgiving holiday, the wire was not sent to payoff US Bank until 11/26. We double paid interest that entire time. Escrow said this was unfortunate and just bad timing. Is there anything we can do to fight this? I do feel like it is a scam of some sort.
    Also, US Bank owes us for a day of double interest, but because they haven’t returned it and it’s been over 30 days, escrow said they probably wouldn’t. Is there a legal aspect for keeping money that is not yours?

  17. Harry says

    Chris – Bad timing was truly unfortunate. If you are more experienced, you would count the days and pick a different day for signing. Nobody was out to scam you. They were more concerned about finishing one off and moving to the next than saving money for you. You will have to look after yourself. It would’ve been nice if someone told you signing on a certain date would mean funding on 11/21 and paying off on 11/26 but they are not obligated to do so. If you have online access for your paid off US Bank mortgage, you can go there and see how they allocated your payoff. If you had an escrow account for taxes and insurance, the excess payoff may have been deposited there, which eventually will be returned to you. Every bank I paid off returned the excess. They may be slow but they don’t keep your money. You can always call and ask them.

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