Why might you be told to bring money to the closing of a rate and term refinance of your home?
Often your loan professional will try to net your refinance to zero, or make it so there is no disruption in your mortgage. The time of the month your closing happens will actually determine the amount of money you need to pay at the closing. When you pay mortgages, you pay them in arrears, meaning for example if your payment is on July 1st you would pay June’s interest then. Refinance doesn’t allow you to skip the old payment, as you still have interest. You will more or less combine the old and the new.
Another reason for payment at the closing could be escrow accounts. Escrow funds will not transfer from the old lender to the new lender. You must start new accounts and fund them while you wait for old loans to settle out. The leftover money will be reimbursed eventually.
If you have any questions about refinancing, contact us by calling (781) 319-1900.
Copyright © 2019 Stiles Law, All rights reserved. Stiles Law is a Massachusetts licensed law firm and all content is based on Massachusetts law. The information presented above is meant to be used for general informational purposes and it should not be construed as legal advice or legal opinion on any specific facts.