FAQs: Refinance Edition
January 4, 2021
FAQs: Refinance Edition
Q: How will my new loan amount be determined?
A: We’ll order a final payoff on your existing mortgages and will share a copy of that statement with you along with a summary of your final closing costs. With this information on hand, we will consult with you to set the final loan amount and get you all squared away!
Q: Is this the lowest rate I can get and is it final?
A: We specialize in finding low rates for every person we work with and will only ever come to you with the lowest possible rates we can find. This rate is an estimate based on the information you have provided. Once we pull your credit, we can get you a more definitive loan estimate.
Q: What's APR?
A: An annual percentage rate, or APR, is the rate of interest per year that is paid to a mortgage lender. APR's can be fixed or adjustable depending on the loan.
Q. What happens with my existing escrow account and how is my new escrow account funded? (Prepaid Items and Escrowing for Property Taxes and Insurance)
A: While these quotes don't include an estimate for funding your new escrow account, we will have one before the process is complete. You will also be refunded for any money in a current escrow account at the time of the payoff of your existing mortgage.
Q: Where do closing costs and fees come from?
A: Closing costs and fees come from a myriad of transactions that occur during the mortgage process. They include mortgage insurance, homeowner's insurance, appraisal fees, and property taxes. Typically, closing costs and fees calculate out to be around 2% - 5% percent of your total home cost.
Q. What is the difference between Prepaids and Escrow?
A: Based on the timing of the settlement on this refinance, payments may be due for property taxes and property insurance within the time period between the settlement date and the first mortgage payment due date on this new mortgage. These payments are collected as "Prepaids" at the time of settlement on this refinance to insure timely payment. Monies collected to fund your new escrow account are for the purpose of making all future property tax and property insurance payments.
Q. Do I need to continue to make monthly mortgage payments on my existing mortgage?
A: Yes! Until the funding of your refinance is done, you still are required to make your mortgage payments.
Q: Why do you need my social security number?
A: We use your social security number and other personal information to get a clear and accurate understanding of your financial situation. It is standard practice in all financial transactions and we take every precaution to ensure your information is safely and securely stored.
Q: How long will this process take and what's next?
A: Our goal is to complete this entire process, from loan application to closing, in under three weeks or less. The next steps to making this happen is pulling your credit and getting all of your details confirmed. Then, we can lock in your rate and get the process moving!