Refinancing Question!

May 14, 2009 6:51 PM

Why is the disbursement amount to my original mortgage lender more than what they say the payoff amount is?

It's my first time refinancing and I noticed something while looking at all the paperwork.

On my settlement statement for the refinance it has the disbursement to others at an amount that is approx $1,200 higher than the amount that I see when looking at the Early Payoff Calculation from my original mortgage lender.

I am not looking at the balance on my statement, I am looking at the actual payoff calculation my original lender provides on their website.

The Question: Is this normal? I assume that my original lender will refund the money to me? Is there an average time frame for getting that check?

If it matters, my loan was/is being serviced by Countrywide which is now BofA. I've tried The Googles, but can't seem to frame my query correctly to find out...

Anything else I need to know about how everything gets transferred around?

Thanks everyone!

posted by Zoyashka to work & money (5 comments total)

Sounds like they rolled the refinance costs into the new loan.
posted by gjc at 7:36 PM on May 14

'there may have been accumulated interest since that payoff figure was calculated.
posted by JimN2TAW at 9:42 PM on May 14

The difference might be the amount of interest accrued for a month or part of a month, on the money you owe your original lender

Look at how much interest you were paying in your last few payments. Think about what day of the month your payment is due and what day of the month the monies will be remitted to your original lender when your refi goes through.

You say the overage is $1200. So, as an example, say that the interest portion of your mortgage payment has been about $2400, your mortgage is due on the first, and the money will go to the original lender on the 15th (halfway through the month). Then you'll owe one half of a month's worth of interest, or about $1200.
posted by Sublimity at 9:43 PM on May 14

As a veteran of several refinances I would say Sublimity is probably right. If you read the fine print on the website it may well say that the amount it gave you is an estimate; every time I have refinanced my house the lender has said that the exact amounts for a number of items in the paperwork would not be final until a closing date was set to allow for such things a prorating the interest for that month.
posted by TedW at 6:11 AM on May 15

Thirding Sublimity and TedW. I'm in the middle of a refinance and have the same issue - the total balance left on my mortgage is not the same as the "mortgage amount" listed on the closing estimates. In my case, the mortgage broker included 30 days extra interest in the initial estimate to create a worst-case-scenario estimate. That is, if I make my last mortgage payment on the 1st of the month, and we close on the 30th, there will be an extra 30 days interest on the payoff amount, in addition to the principal balance.
posted by RobotNinja at 8:36 AM on May 15