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I am beginning the process of refinancing my current home. I currently owe $145,000 on a 30-year 6.125% 160,000 loan. I got a quote from my current bank at 4.75% - no points and am about to begin the process.
My questions,
1. How are escrow amounts calculated during a refinance with the same bank? My only escrow payment is property taxes which were just paid off in November, and have a big balance. I would have got a nice refund when my analysis gets done in a few months. Will I have to fund a new account and have them refund me the old balance, or is a a common practice to just transfer those funds at closing.
2. Is it possible to even cancel an Escrow account and just pay it myself? Will they charge a fee/higher rate?
3. Do I have to worry about PMI on a streamline refinance of a Freddie Mac loan. I currently do not pay PMI (I paid 20% downpayment), but may fall below 80% with current housing market.
1. Yes, your lender will set up a new escrow account like you dont have one and the money in the current account will be refunded.
2. Yes, you can tell your lender you dont want to escrow, rate will be same but some lenders charge a .25 fee(on 200,000 that is $500)
3. No you shouldnt.
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