Closing is all done and you have finally took the breath that you have been waiting weeks to take. You can now take advantage of the benefit of your mortgage refinance. Whether you are getting a lower payment, shorter term, or cash out, here’s what you can expect after closing.
Your Escrow Account
- If you had an escrow account with your previous loan, the lender will send a check within 30 days.
- You can also elect to have your escrow amount applied to the unpaid principal of the old loan. This reduces the payoff and potentially lowers your monthly payment of the refinance.
Typically, in a refinance loan, the escrow is automatically assumed to be returned to the borrower. If you would like to apply it to the payoff, let your loan originator know.
Make Additional Payments
It is possible to make additional payments, to be applied to principal, on your new loan. By making additional payments, you can save interest and reduce the length of your loan. Making an extra payment each year can dramatically reduce the length of the loan and create significant interest savings.