When Can I Stop Making My Old Mortgage Payment When I’m Refinancing?
When can you stop paying on your current mortgage payment if you’re refinancing your home loan? I’m going to answer that question and a lot more, in today’s tip of the week.
If you’re currently refinancing your home loan, you might be thinking to yourself, “When can I stop paying on my current mortgage? I mean, I’m paying it off anyway, I could probably just stop paying it, right?” The answer is, you do not want to stop paying your mortgage payment until you can confirm that that mortgage is paid off.
In other words, definitely pay that mortgage payment all the way up until closing on your new home loan, because the current mortgage company, don’t know that you’re refinancing. They don’t know that the loan is being paid off, and until the mortgage is actually paid off, you’re on the hook for that payment.
That means if you don’t make the payment in time, you’re going to get a late fee after the 15th AND you’re going to get a 30 day late payment on your credit – if the payment goes a month or 30 days or more past the due date. The point is keep paying on your mortgage payment, until you confirm the mortgage is paid off, and that means even after closing.
On a primary residence, there’s a three day right of rescission after you signed the paperwork. You want to make sure that not only has your new loan funded or taken effect, but that your old mortgage company has received the payoff, and that loan is paid off. At that the point you’re off the hook for that mortgage payment.
If the check or payoff is too much or if you made a payment, you will get refunded that overage or the payment.
Now let’s say you’re doing a cash out refinance, and you’re wondering about some of the other accounts that you’re paying off, credit cards, auto loans, whatever it is… The same thing goes for those, you want to keep paying on those accounts, until you can confirm that they’re completely paid off you are on the hook for those payments.
Let us know if you have any questions on that or if you want to look at your particular situation, to see if a refinance makes sense. We are The RJ Baxter Team with Fairway Mortgage at 303-670-0137. It’s free to talk to us!