Refinancing Loan Amount?
kincaid1 asked:
We refinanced our home recently. I was asked how much our existing loan amount was, lets say I told the loan officer it was $110,600. He said we’ll round it up to $111,500 because there is usually more that is owed than what you see on your statement. When we closed, it said our payoff amount to the old loan was $110, 976 and my new loan amount was going to be $111,500. Why don’t they just refinance the payoff loan amount? Does that mean that the bank just made an extra $500 off of us to refinance? Why is it done this way? Thanks for any help.
James, yes I reviewed the GFE and paid the closing costs out of pocket.
Ruben
We refinanced our home recently. I was asked how much our existing loan amount was, lets say I told the loan officer it was $110,600. He said we’ll round it up to $111,500 because there is usually more that is owed than what you see on your statement. When we closed, it said our payoff amount to the old loan was $110, 976 and my new loan amount was going to be $111,500. Why don’t they just refinance the payoff loan amount? Does that mean that the bank just made an extra $500 off of us to refinance? Why is it done this way? Thanks for any help.
James, yes I reviewed the GFE and paid the closing costs out of pocket.
Ruben
Tags: Gfe, Loan Officer, Refinancing Loan
July 31st, 2009 at 2:52 pm
Brad
No, the bank makes their money with the interest rate. Every time you close a loan you must pay taxes and various other fees. He rounded the payoff up a bit to make sure that what he quoted you wasnt going to be to little and you come to the closing table surprised. It is impossible to refi with the original loan amount. the first thing you should have reviewed before signing anything is a good faith estimate showing all closing and settlement costs. When looking at thin make sure that there are title costs, intangible tax, broker fees, lender fees, escrow fees. ect. on that loan amount you should expect roughly a few thousand dollars on the GFE. If you have any further questions contact me at
if the closing costs were paid out of pocket there is still settlement charges. Also, its a possibility that it was a lender or broker fee. Without seeing it, its hard for me to tell exactly. If you want to email it to me I can take a look at it. Maker sure you cross out all your personal info before you do. I dont need to see anything but the numbers and what they go to. and ast the answer below this one states. You have 3 business days to rescind the loan if you want to.
August 1st, 2009 at 10:52 pm
Theodore
The lender got a payoff letter from the old lender. That gave the payoff amount either for a specific day or through a specific day. Then for each day after that, one day’s worth of interest is added to the payoff amount. The lender will wire your payoff on a certain date, which is at least 5 days (counting the day you sign as 1 and the day the loan funds as 5 and the 3 days in between the days during which you can change your mind…called right of rescission or right to cancel) and adds about 20 days to the payoff as of the date you close. Yes, it’s confusing to describe, but not when you’re doing it. That way the won’t pay the previous lender too little. He won’t release the lien on your house if that happens, until it’s straightened out. If they’ve paid more than you owe, you’ll should get the overage in a check from the previous lender, along with any escrow funds collected but not yet owed/paid.
Does that help? The short answer is they have to pay the daily interest on your old loan from the last time you paid until the day the loan funds. If you’re owed any money, the old lender will give it to you.