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My bank called me an offered refinancing, its around 0.75% less than my current rate.
I asked what my monthly difference in payment would be and she said around $270.
Which is a good chunk of change.
Anyways, I knew there are closing costs involved but I did not want to pay 10,000$, so they basically were able to finance my closing costs into the loan and did not change the monthly payments much.
Ok so loan estimate on 9/4/19 was 265$ cheaper then my current payment and $355 closing costs (rest financed).
Ok great.
Appraisal done, paid $425 for it.
and then a week later I find out I have a lein on my house from the solar company (new install this year)
Called the solar company and they can subordinate my lein, only costs $225. Great. I send in the info and the money.
Then 5 days before closing,
I get a new estimate.
Taxes went up and escrow payments all went up. The total prepaid interest days doubled and my loan payoff also somehow went up, and all of that added to an increase in monthly payments (so now my monthly saving is only 60$ / month) and closing costs went up to 4700$.
I will call them tomorrow, but I am confused how can this be.
How do they estimate the taxes? I looked at my town and there is no new rate, my assessed value did not change so I am not sure why they increased my taxes in the escrow.
Also why did my repayment amount went up that makes no sense.
And I am not sure why they increased the amount of days I have to prepay the interest from 15 days to 30.
All of that just rubs me the wrong way.
If the changes are correct and its only going to be a $60 / month monthly difference i am not going to go thru with it but can I ask them for my assessment fee back because I feel they lied to me.
what is your interest rate to the solar company, and is it higher than the mortgage rate you're getting?
you'll need to ask your mortgage lender about all these changes in estimates. Obviously, you need them to carefully explain it to you, item by item, because you don't understand. This will be your second time with prepaid interest, an by now SOMEBODY should have explained it to you until you understood it.
you only actually prepay interest from closing day to the end of the month (or however many days remain until what will be your payment date). And FWIW, remember that you won't have any payment that first month. Like this:
Close on Wed Sept 25.
Payments will be due on the 1st.
You should actually prepay 5 days of interest. Then Oct 1 you'll have no payment. Then Nov 1, your payment includes the interest accrued from Oct 1 to Oct 31.
Or
Close on Oct 1.
Then you will indeed prepay the interest to Oct 31. Your first payment is Dec 1 now.
As to the "value" of refinancing - take the total closing costs - whether you pay them or they're rolled into the loan, and divide that by your monthly savings.
then, your loan payoff increases every day later that you close - you pay interest everyday the loan is outstanding.
as to property taxes - if your city/county has changed the tax rate, then your taxes would go up. And so would the escrow portion of your payment. is the increase in closing costs because of your escrow account? I've never really thought about it ... I guess they're closing your existing escrow account (and you'd get a refund of every penny in it, you'll receive within 30 days) and then opening a new one that has to be funded.
My bank called me an offered refinancing, its around 0.75% less than my current rate.
I asked what my monthly difference in payment would be and she said around $270.
Which is a good chunk of change.
Anyways, I knew there are closing costs involved but I did not want to pay 10,000$, so they basically were able to finance my closing costs into the loan and did not change the monthly payments much.
Ok so loan estimate on 9/4/19 was 265$ cheaper then my current payment and $355 closing costs (rest financed).
Ok great.
Appraisal done, paid $425 for it.
and then a week later I find out I have a lein on my house from the solar company (new install this year)
Called the solar company and they can subordinate my lein, only costs $225. Great. I send in the info and the money.
Then 5 days before closing,
I get a new estimate.
Taxes went up and escrow payments all went up. The total prepaid interest days doubled and my loan payoff also somehow went up, and all of that added to an increase in monthly payments (so now my monthly saving is only 60$ / month) and closing costs went up to 4700$.
I will call them tomorrow, but I am confused how can this be.
How do they estimate the taxes? I looked at my town and there is no new rate, my assessed value did not change so I am not sure why they increased my taxes in the escrow.
Also why did my repayment amount went up that makes no sense.
And I am not sure why they increased the amount of days I have to prepay the interest from 15 days to 30.
All of that just rubs me the wrong way.
If the changes are correct and its only going to be a $60 / month monthly difference i am not going to go thru with it but can I ask them for my assessment fee back because I feel they lied to me.
Has anyone has this happen to them?
I hope its just a mistake.
If bank CALLS YOU and offers refinancing out of the blue, someone is going to get screwed and it isn’t the bank. Just saying .. banks are not altruistic nor are they your friend.
First, did you receive a new loan estimate or a closing disclosure? Does it have the disbursement date and first payment date on it? What are they?
I don't know what state you are in and when your taxes are due, but if they are due between now and the beginning part of the year, the number of months they have to impound will be high. Especially if the whole year is paid in one installment. Same with insurance. If it is due in the next few months they will collect almost a full year (or even more) because it has to be paid out so soon after your first payment. The downside is if they are increasing your loan amount to cover these impounds you are financing them for the loan term.
There are ways to counteract some of these things if you are trying to get your loan amount as low as possible.
I asked what my monthly difference in payment would be and she said around $270.
Which is a good chunk of change.
Anyways, I knew there are closing costs involved but I did not want to pay 10,000$, so they basically were able to finance my closing costs into the loan and did not change the monthly payments much.
So basically your telling me they are going to charge you $10,000 to have a lower monthly payment by $270.
And your thinking this might be a good deal........
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