I owed $165000 on a 20 year @ 5.6% Refinanced with another company, 4.375% @ 15 years.
Company A = old mortgage Company B = new mortgage
Closing was October 26th. The payoff quote provided by A was good until November 10th, 2009. HUD statement from B stated I would be paying daily interest from October 26-November 1st.
However, there was a 3 day period after the 26th in case I wanted to rescind the new loan.
The old loan was paid off via wire transfer on October 30th. Company A stated I will get a refund on daily interest from October 30th to November 10 (payoff good-through date).
So, why should I be paying interest on the "new" loan from October 26th to October 29th? Shouldn't that money be refunded as well? I called my mortgage guy back and he was unsure of the answer.
sparky3 said: HUD statement from B stated I would be paying daily interest from October 26-November 1st.
so they told you that you would be paying interest from OCT 26 to NOV 1 and now you are confused because they are charging you for it?
nrsmimi
Ancient Member
posted: Nov. 3, 2009 @ 2:14p
If the wire transfer did not go through until the 30th, the interest accrues until that date. Usually escrow does not close until everything is funded.
sparky3
Member
posted: Nov. 3, 2009 @ 2:20p
tante said: sparky3 said: HUD statement from B stated I would be paying daily interest from October 26-November 1st.
so they told you that you would be paying interest from OCT 26 to NOV 1 and now you are confused because they are charging you for it?
Why should I be charged interest on two loans from Oct 26-30th? By law I could not opt out of the 3 day recension period.
anthonyu
Happy Member
posted: Nov. 3, 2009 @ 2:20p
If you closed on October 26, what caused the delay for the funds to be wired to Company A on October 30th? Is this due to the 3 day rescission period? No one cares if it is a day difference, but this is essentially the 4th day.
sparky3
Member
posted: Nov. 3, 2009 @ 2:22p
nrsmimi said: If the wire transfer did not go through until the 30th, the interest accrues until that date. Usually escrow does not close until everything is funded.
There was no "escrow". Loan was not funded until October 30th. Wire was sent that Friday morning - it was a same day transfer/pay off.
Now my lender is asking for my "Truth in lending" statement. Wonder what he wants that for.
arch8ngel
Senior Member - 1K
posted: Nov. 3, 2009 @ 2:36p
It seemed scammy when I did my refi earlier in the year, but you're basically paying interest on both loans for the 3-days during which you have the right to rescind.
sparky3
Member
posted: Nov. 3, 2009 @ 2:40p
anthonyu said: If you closed on October 26, what caused the delay for the funds to be wired to Company A on October 30th? Is this due to the 3 day rescission period? No one cares if it is a day difference, but this is essentially the 4th day.
Yes. I had to wait out, by law, the 27th-29th for the rescission period. If it were up to me I'd have told them to send out the wire on the 26th. But they couldn't legally until 3 full days were up.
Sounds like a nice little 4 days of free interest for mortgage companies!
sparky3
Member
posted: Nov. 3, 2009 @ 2:46p
I called the old mortgage company to find out when they are sending my escrow money. She said 45 days. Which sucks, as 1/2 year property taxes are due in December. So they just get to sit on my 5 months of escrow for 45 days? This just doesn't seem right.
sparky3 said: nrsmimi said: If the wire transfer did not go through until the 30th, the interest accrues until that date. Usually escrow does not close until everything is funded.
There was no "escrow". Loan was not funded until October 30th. Wire was sent that Friday morning - it was a same day transfer/pay off.
Now my lender is asking for my "Truth in lending" statement. Wonder what he wants that for.In that case Company B shouldn't be charging you interest starting on Oct 26. The standard of refi (not closing on a weekend) is the borrower pays interest on both loans for ONE (business) day.
When I refinanced sometime ago, I did end up paying double interest for 3-4 days. Part of it was due to mailing time since documents were to be sent by mail but the three day right to rescind probably did play a role as well. I don't recall the details but do remember the few days of extra interest.
arch8ngel
Senior Member - 1K
posted: Nov. 3, 2009 @ 3:02p
nycll said: sparky3 said: nrsmimi said: If the wire transfer did not go through until the 30th, the interest accrues until that date. Usually escrow does not close until everything is funded.
There was no "escrow". Loan was not funded until October 30th. Wire was sent that Friday morning - it was a same day transfer/pay off.
Now my lender is asking for my "Truth in lending" statement. Wonder what he wants that for.In that case Company B shouldn't be charging you interest starting on Oct 26. The standard of refi (not closing on a weekend) is the borrower pays interest on both loans for ONE (business) day.
It depends on the laws in your state. In states that require a right to rescind clause, it seems typical that you have to pay interest on both loans for the duration of the rescission period, since the first loan has to still exist (in case you rescind) and the second loan is already open.
dimatkach
Senior Member
posted: Nov. 3, 2009 @ 7:18p
arch8ngel said: It depends on the laws in your state. In states that require a right to rescind clause, it seems typical that you have to pay interest on both loans for the duration of the rescission period, since the first loan has to still exist (in case you rescind) and the second loan is already open.
I just refinanced my mortgage. The closing was yesterday, and I have three days to rescind (until the 5th). The new lender paid me five days worth of interest, and my first payment is going to be on 12/01 for the entire month. The old lender is charging the interest through the 5th, the new one takes over from there. As far as I know, this is more or less how it worked for me in the past as well every time I refinanced. I have never heard about having to pay interest for two loans at the same time. Not to say it never happens, but I have never heard of it. And yes, there is a mandatory right to rescind clause in my state.
sparky3
Member
posted: Nov. 3, 2009 @ 9:24p
dimatkach said: arch8ngel said: It depends on the laws in your state. In states that require a right to rescind clause, it seems typical that you have to pay interest on both loans for the duration of the rescission period, since the first loan has to still exist (in case you rescind) and the second loan is already open.
I just refinanced my mortgage. The closing was yesterday, and I have three days to rescind (until the 5th). The new lender paid me five days worth of interest, and my first payment is going to be on 12/01 for the entire month. The old lender is charging the interest through the 5th, the new one takes over from there. As far as I know, this is more or less how it worked for me in the past as well every time I refinanced. I have never heard about having to pay interest for two loans at the same time. Not to say it never happens, but I have never heard of it. And yes, there is a mandatory right to rescind clause in my state.
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