Question about loan payoffs

[tnkrbell]

Ok I have a question My loan payoffs will be ordered this week for a closing date of August 9th. Ok my question is do they do the payoff quote amount for what is due right now to pay it off??
THe reason I ask is I have a mortgage payment due on August first (I allways pay around the 10th or so Since there is a grace period) Is the August payment included in the payoff?? Or do they assume that will be payed then they make the payoff? Do you get what ium saying?? Do I make my August payment or do I pay it in my pay off to the mortgage company??
Thanks

 

[Kermit]

Did you get the payoff in writing or over the phone? If it's in writing, it should include somewhere in the statement the date until which that amount is the actual payoff. Does that make sense? My guess is that the amount you have will be fine.

 

[StilesMom]

No need to make your August payment. It will be included in the payoff amount. Just make sure your closing attorney knows this so that the payoff is accurate. We refinanced last month and I went ahead and made the payment since we weren't closing until mid-month. I made sure they knew this and everything worked out fine.

 

[KerryD]

Your payoff figure will generally cover a specific date and then have instructions for the title co to use in determining the figure in case it closes on a different date.

As far as making an August payment, only the Title co can answer that question. If your payment is due August 1st, and you close on August 8th, could be charged a late fee and have a late payment show up on your credit report. Call the Tilte co TODAY and ask them how to proceed.

Kerry

 

[Tina]

How funny. We are also refinancing on August 9th. I generally pay by the first of the month. I mailed my payment this morning. You can check with your lender, but I think most will assume you have paid your August payment, since it is due 8/1. They really should get a payoff amount from your current lender a few days prior to close. If you should pay and they don't have the payment reflected on your closing statement, you will get a refund check in the mail from your current morgage co. Of course, you'll have to wait a few weeks. You can also call your current lender and ask about any late fees if you should skip they payment. I think the best advice is to call both lenders and let them know of your intentions. That way you can be sure everything will be correct when you sit down to sign your paperwork.

Happy closing!!

 

[disykat]

We don't even have a closing date for our refinance yet and I was told not to make my payment. If I don't have a date soon I'll have to pay it. I was told to wait it out a few days and send it in only if my date looks like it will be past the 15th since I have a grace period until then. The mortgage officer said it's better for me to hang on to the money than to have to wait for a refund check later.

 

[KerryD]

Let me try this again.

There will be differences in how this is handled depending on any number of situations. A refinance without changing mortgage co's will be handled differently than a refinance which invloves a new mortgage co. ALL of these scenarios can also change depending upon the type of loan you are paying off. Is it Conv. FHA, VA, Ballon, ARM...etc....etc.......

If this is a new loan in regards to new or new to you home, again, it will depend on any number of circumstances including most importantly what type of loan you have now. There are tons of different types of loans out there.

CALL THE TITLE CO! Taking any advice outside of that could cost you money and a ding on your credit. Better safe than sorry.

 

[StilesMom]

KerryD - Why would the type of loan matter? And why would a title company be involved with a refi if the lender is not changing? There wouldn't be anything new to record for a simple rate change - unless the type of loan were also changing and then I'm not even sure you would need to re-close.

If closing takes place on the 9th, nothing says that you HAVE to make your payment on the 1st. It will simply be included in the payoff amount. Besides, if the lender does not process the payment in time - credit for it may not appear in the lender's system in time to provide an accurate payoff amount. And some lenders charge to provide a payoff amount - so you don't want to have the title company call more than once.

Yes, the smart thing to do would be to ask your title company for advice on this. But keep in mind that there will be no DING on your credit unless your payment is over 30 days late.

 

[tnkrbell]

Thanks for all the advice,I will talk to the title company on Wensday and find out what to do.
I am going with a different mortgage company other then the original because I am combining my first and second.

 

[KerryD]

Originally posted by StilesMom
KerryD - Why would the type of loan matter?

The type of loan matters because each type of loan addresses payoff differently. FHA loan payoffs will always include a full months interest. Conv. loan payoffs will be figured to the day of closing. Some Balloon loans and ARM's have penalties for early payoffs.


>>And why would a title company be involved with a refi if the lender is not changing? >>

I didn't see anything in the original post about a refi. However, most refi's will still go to a title co (sometimes depending upon the state) to insure there are no tax leins, mechanic leins etc. More often than not, all signatures will need to be notarized. It's also not unusual in some cases to have a new survey ordered. All those things would normally be handled by a Title co.

>>There wouldn't be anything new to record for a simple rate change - unless the type of loan were also changing and then I'm not even sure you would need to re-close.>>

Well, a Title co does more than just record deed changes. Ultimately they protect every party in the transaction and they also monetarily insure the transaction. Even if it were a refinance with the same mortgage co, it still might close at a title co. The lender will want to insure that there are no outstanding liens against the property. If a title co states as much and closes the transaction with an outstanding lien in place, and that lien holder took this property into foreclosure, they are liable to the mortgage co for the entire amount of the loss plus potential penalties. There are also laws in some states that address potential lender fraud and disclosure issues and they state that all transactions involving a mortgage loan must close at a title co. Again, all states are different, but finalizing a refinance outside of a title co will be the exception, not the rule. IMHO.

>>If closing takes place on the 9th, nothing says that you HAVE to make your payment on the 1st. >>

In theory, your original loan agreement will not excuse a late payment because of a closing date. If the payment is deemed late, a late fee could legally be charged. In practice, it's up to the mortgage co. Some say pay and some say don't. More often than not, these deals are worked out between the person closing the transaction and the mortgage co. Be it a Title co or a mortgage rep, someone actually involved in closing THIS transaction needs to be called and ASKED. However well meaning all of us internet posters might be, only the person closing this transaction can answer these questions.


Yes, the smart thing to do would be to ask your title company for advice on this. But keep in mind that there will be no DING on your credit unless your payment is over 30 days late.

And if something unforeseen delays the closing, a problem with not making the payment MIGHT present itself if someone were not to call the people involved in this transaction and find out the correct answer.

 

[KerryD]

Well. I sure botched that quote job....hehe

Hopefully it made sense!