Simplifying the Refinance Process

At Residential Bancorp, we want to help simplify the home buying process by making sure our customers are well-informed and there are no surprises.  Know what to expect and enjoy a smooth, comfortable closing on your home loan by reviewing these helpful tips.

AUTOMATIC PAYMENTS
If you have automatic withdrawal set up on your existing mortgage payment, it’s generally a good idea to cancel it a full two weeks before closing with your new lender to avoid being double charged.

SKIPPED PAYMENTS
Some originators might promise you’ll get to skip a mortgage payment.  Sounds great, right? There are a few things to keep in mind. If the closing date on your new loan is planned after your past due payment date, your credit could be affected if you don’t make that payment in time.  Also, when you skip a payment, the mortgage interest charge will be added to your new loan balance and you will now pay that interest over time on your new loan term.

ESCROW FLOAT
Be aware that the escrow account (your savings account) with your prior lender will be sent to you within about 2 weeks after you close on your new loan. This means you’ll have to make an advance payment to build your new escrow account with your new lender.

VALUATION ISSUES
Sometimes a refinance will make the buyer aware of property devaluation. When this occurs, it could require you to put more money down to maintain a desirable LTV, and/or it could affect your loan amount or available cash-out options.