Funds For Closing on Refinances
With a no-cash-out refinance, we like to understand our borrower's preference on closing costs. Even though you may have chosen a no closing cost option, you will still be responsible for per diem interest on both your old and new loans, and if you have an escrow account, you will also be responsible for funding a new escrow account. Note that you will receive a refund from your old escrow account which will make this essentially a wash, however, this refund will take 30 to 60 days to be processed by your old lender.
The bottom line is that if we use the loan balance reported on your credit report for your new loan balance, you will need to bring a fair amount of money to the closing table. This amount can be as high as 2-3% of your total loan balance.
As a high service company, we like to provide options to our borrowers.
1. We can roll the prepaid and postpaid per diem interest and the escrows into the new loan such that you bring approximately $0 to the closing.
2. We can simply use the mortgage balances as reported on your credit report for your new loan balance, and you can bring certified funds to the closing to take care of the prepaids and escrows.
3. We can roll the interest and escrows into your new loan and also get you up to $2000 cash back at closing. We will get as close to the $2000 as possible, however, because we cannot exceed it by even 1 cent, we try to be somewhat conservative and you may only receive $1500 or so.
Please let us know your preferences as soon as possible so that we can make the appropriate adjustments to your new loan balance.