Managing Your Mortgage Payments
Now that all the paperwork is complete, you can start benefiting from your refinanced mortgage. Whether you're getting a lower payment, a shorter term or cash out, here's what you can expect after closing.
What Happens to Your Escrow Account
If you had an escrow account on your old loan, that money could come back to you in one of these ways:
- You could receive a check for your escrow funds from the lender of your old loan. If you're receiving these funds by check, you can expect to get them within 30 days.
- Your escrow funds will be used as part of the payoff for your old loan. This means a couple of things. First, it will reduce the total amount that needs to be paid off. Second, if you're getting an escrow account on your new loan, your old escrow funds can be transferred to your new loan.
Your lender will ask which of these options you prefer; however, we recommend that you allow your escrow funds to be used as part of the payoff for your old loan. This will speed up your loan process and minimize the amount of money that you'll be required to bring to closing.
Making Additional Payments
You can save on interest and reduce the length of your loan by making additional payments or paying extra on your monthly payment. Making just one extra payment a year allows you to save a significant amount on interest over the life of your loan.