Zillow Advice: Refinance - How come I don't get my interest back? http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ Zillow Advice | Zillow Real Estate Agreed, it would have cost ... http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ Agreed, it would have cost you more money to close on June 30 because you would have funded on&nbsp;July 6, resulting in 26 days of prepaid interest on top of 2 months interest added to your payoff.&nbsp;The skipped payment tactic really gets me and when you are told you will skip 2 payments on an <a href="http://www.zillow.com/fha-loan/">FHA</a> refi,&nbsp;it is costing you 3 months to get it. You just dont see it because it is buried in the new <a href="http://www.zillow.com/mortgage/">loan</a> amt. &nbsp; Tue, 11 Aug 2009 02:58:00 GMT http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ 2009-08-11T02:58:00Z "FHA requires you pay any ... http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ <strong><em>"FHA requires you pay any interest left in the month you close to the original lender"<br/><br/></em></strong>FHA imposes no such requirement at all. FHA ALLOWS lenders to collect interest through to the 1st date of the month and even ALLOWS lenders to refuse prepayment (paying off) on any day other than the 1st of the month but it is not a requirement. Most lenders (including us)&nbsp;do impose at least one of the above restrictions but if in doubt check with your current lender for their policy.<br/><br/>Ginnie Mae, which is where most FHA loans are pooled,&nbsp;states that security holders are entitled to interest through the end of the month on loans which are removed from the pool due to being prepaid in full. Because the current lender has to pay this, this is why most lenders charge the full month interest on pay off.<br/>If&nbsp; your current lender imposes those restrictions, you want to settle on a date that allows your loan to fund on or before the last date of the month. Settling the last date of the month won't achieve this as youll fund the early the next month.<br/><br/>You don't actually skip a months payment and besides that's not a tangible benefit to refinancing. Mortgage payments are paid in arrears, when you make your payment you are paying for the month you just left, so whereas you&nbsp;may have a month that you don't make&nbsp; a payment, you are not actually skipping a payment.<br/><br/>In your case, your July payment paid for June. However, because of not getting it paid off and your old lender is imposing the 30 day restrictions, July interest (which would have been your August payment) is included in your payoff, meanwhile it looks like your new lender charged you 15 days July interest and I assume your first new payment is September. You've actually paid only 15 days interest more than you would have it the settlement date had been structured properly.<br/><br/><strong><em>"Why didnt he realize this in the first place"<br/></em></strong><br/>Maybe he can't be bothered to learn the product. FHA posts all their guidelines at <a href="http://www.fha.gov/" rel="nofollow">www.fha.gov</a> or at www.HUD.gov<br/><br/><br/><br/><br/><br/><br/> Tue, 11 Aug 2009 01:46:00 GMT http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ 2009-08-11T01:46:00Z LO missed the FHA training ... http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ LO missed the <a href="http://www.zillow.com/fha-loan/">FHA</a> training webinar.<br/>They certainly made enough to be able to repay you for the confusion. Threaten to complain to licensing regulator. Tue, 11 Aug 2009 00:07:00 GMT http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ 2009-08-11T00:07:00Z Your&nbsp;Broker should have ... http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ Your&nbsp;Broker should have know how <a href="http://www.zillow.com/fha-loan/">FHA</a> handles the payments and interest&nbsp;and the fact it would not&nbsp;be prorated.&nbsp;&nbsp;&nbsp;Ask your Broker to&nbsp;refund the interest it was their miss quote. Mon, 10 Aug 2009 23:55:00 GMT http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ 2009-08-10T23:55:00Z Suki,You are not simplifying ... http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ Suki,<br/><br/>You are not simplifying it.&nbsp; <a href="http://www.zillow.com/fha-loan/">FHA</a> requires the entire months Interest payment regardless of the day you close.&nbsp; The only <a href="http://www.zillow.com/mortgage/">loan</a> that you really need to close at the end of the Month is FHA.<br/><br/>Blame your <a href="http://www.zillow.com/directory/lenders/">lender</a> for not knowing this...Blame Hud for requiring the full months interest. Mon, 10 Aug 2009 23:36:00 GMT http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ 2009-08-10T23:36:00Z OK, let me clarify all this ... http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ OK, let me clarify all this in the simplest way possible.<br/><br/>1) My <a href="http://www.zillow.com/mortgage/">loan</a> was supposed to close at the end of June but too much of a backlog from <a href="http://www.zillow.com/fha-loan/">FHA</a> pushed it to mid-July.<br/><br/>2) My broker told me to hold off on the July payment at FIRST but when the time period ran over too far stated that we should include the July payment as part of the closing process. This was so the bank wouldn't receive a payment for July and try to close and effectively double our July payment. It was supposed to just make things easier.<br/><br/>3) Our broker said that a benefit of <a href="http://www.zillow.com/refinance/">refinancing</a> was that we would skip a months payment. This was initially set to be July, it then became August because the time ran over and we had to effectively pay July which was understood. He then stated that we would just skip AUGUST and the first payment would be in September.<br/><br/>4) Our loan doc indicates $5316 for INTEREST which amounts to 2 MONTHS of interest. I am assuming this is JULY and AUGUST. At the time my broker had explained that we paid interest for JUNE and JULY and we would be receiving a refund in a pro rated amount for when the loan closed and all docs were completed. This ended up being 7/17. The bank also confirmed we would receive back this $80@14 or $1120.<br/><br/>5) According to other responses you have to pay the month you are closing in (obviously) and an additional month. The broker didn't explain it this way. I was to SKIP a months payment so effectively I should have only been paying $2600 interest for the month of JULY since the payment had not been made. He explained that we would be paying the JULY payment as part of closing and there would be NO AUGUST PAYMENT.<br/><br/>6) Now I call him and tell him the bank is only giving us back $350 dollars total and have no record of this refund of interest. He calls the bank and confirms and explains to me that my LTV is too high and that the bank cant skip the month of interest for AUGUST because of this. It can't exceed 97.5%. He said nothing about an extra month of interest at any time because of it being an FHA streamline loan.<br/><br/>7) Why didnt he realize this in the first place if we were paying 2 months of interest totalling $5316? I mean it seems he DIDNT know and had to clarify after the fact even though the bank and he told me on 2 seperate occasions that I would receive back the interest. But what is the extra interest for if he DIDNT know that it was supposed to be. Ive posted the paperwork in this question already so I am wondering what that extra interest was for on his part.<br/><br/>8) Given my questions does the document and the payments we made make sense? I posted them on an earlier question in order to find out if this all makes adds up.<br/><br/><br/> Mon, 10 Aug 2009 23:32:00 GMT http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ 2009-08-10T23:32:00Z On an FHA loan the monthly ... http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ On an <a href="http://www.zillow.com/fha-loan/">FHA loan</a> the monthly interest on the loan being paid off is not prorated it is paid for the entire month when the payment is made. It has nothing to do with the streamline process.&nbsp;&nbsp; Best time to close an FHA loan is at the end of the month to get the full use of your paid interest. Mon, 10 Aug 2009 22:48:00 GMT http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ 2009-08-10T22:48:00Z Why is the closing date showing ... http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ Why is the closing date showing 6/30 on the doc? It's odd, but probably not significant since you state you actually funded (?) on 7/17. <br/><br/>I'm going to stick with my original response - Streamline <a href="http://www.zillow.com/fha-loan/">FHA</a> requires you pay any interest left in the month you close to the original <a href="http://www.zillow.com/directory/lenders/">lender</a>, in addition to the normal prepaying of interest to the new lender. I would request that Nic confirm as he's been doing these a lot longer that I have. Mon, 10 Aug 2009 22:14:00 GMT http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ 2009-08-10T22:14:00Z DATE:&nbsp; July 9, 2009&nbsp;&nbsp;&nbsp; ... http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ DATE:&nbsp; July 9, 2009&nbsp;&nbsp;&nbsp; TIME:&nbsp; 4:04 PM<br/>ESCROW NO.: <br/>LOCATE NO.:&nbsp; <br/>ESCROW OFFICER:&nbsp;&nbsp;&nbsp; CLOSING DATE:&nbsp; June 30, 2009<br/><br/><br/>BORROWER ESTIMATED CLOSING STATEMENT<br/><br/>LENDER:&nbsp;&nbsp;&nbsp; Bank of America, N.A.<br/>BORROWER:&nbsp;&nbsp;&nbsp; <br/>PROPERTY:&nbsp;&nbsp;&nbsp; <br/>&nbsp;&nbsp;&nbsp; <br/><br/><br/>&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; DEBITS&nbsp;&nbsp;&nbsp; $&nbsp;&nbsp; CREDITS<br/><br/>&nbsp;<br/>FINANCIAL: <br/>New 1st Trust Deed to Bank of America, N.A. &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; 497,399.00 <br/>&nbsp;<br/>TITLE CHARGES: <br/>14-ALTA <a href="http://www.zillow.com/mortgage/">Loan</a> Policy - 2006 for $497,399.00 &nbsp;&nbsp;&nbsp; 900.00 &nbsp;&nbsp;&nbsp; &nbsp;<br/>ALTA Form 8.1-06 - Envir. Prot. Lien $25.00 &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;<br/>Endorsement Fee(s) &nbsp;&nbsp;&nbsp; 25.00 &nbsp;&nbsp;&nbsp; &nbsp;<br/>Recording Trust Deed(s)&nbsp; &nbsp;&nbsp;&nbsp; 85.00 &nbsp;&nbsp;&nbsp; &nbsp;<br/>&nbsp;<br/>ESCROW CHARGES: <br/>Escrow Fee to Title Company &nbsp;&nbsp;&nbsp; 350.00 &nbsp;&nbsp;&nbsp; &nbsp;<br/>Draw Deed &nbsp;&nbsp;&nbsp; 50.00 &nbsp;&nbsp;&nbsp; &nbsp;<br/>Overnight Delivery Fee &nbsp;&nbsp;&nbsp; 23.00 &nbsp;&nbsp;&nbsp; &nbsp;<br/>E-Mail Doc Fee &nbsp;&nbsp;&nbsp; 75.00 &nbsp;&nbsp;&nbsp; &nbsp;<br/>&nbsp;<br/>NEW LOAN CHARGES - Bank of America, N.A. <br/>Total Loan Charges: $11,143.03 <br/>Flood Certification Fee to LANDSAFE FLOOD &nbsp;&nbsp;&nbsp; 26.00 &nbsp;&nbsp;&nbsp; &nbsp;<br/>BROKER CREDIT to <a href="http://www.zillow.com/directory/lenders/">Mortgage Company</a> &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; 1,000.00 <br/>LENDER FEE to Bank of America, N.A. &nbsp;&nbsp;&nbsp; 400.00 &nbsp;&nbsp;&nbsp; &nbsp;<br/>Administration Fee to Mortgage Company &nbsp;&nbsp;&nbsp; 995.00 &nbsp;&nbsp;&nbsp; &nbsp;<br/>YSP PD by <a href="http://www.zillow.com/directory/lenders/">lender</a> 6217.49 POC to Mortgage Company &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;<br/>MIP CREDIT to Bank of America, N.A. &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; 3,667.50 <br/>Interest at $80.0600 per day fr 7/15/2009 to 8/1/2009 to Bank of &nbsp;&nbsp;&nbsp; 1,361.02 &nbsp;&nbsp;&nbsp; &nbsp;<br/>America, N.A. &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;<br/>MIP/PMI Insurance Premium to Bank of America, N.A. &nbsp;&nbsp;&nbsp; 7,350.74 &nbsp;&nbsp;&nbsp; &nbsp;<br/>Insurance for 14 months @ $65.34 per month to Bank of America &nbsp;&nbsp;&nbsp; 914.76 &nbsp;&nbsp;&nbsp; &nbsp;<br/>County Taxes for 7 months @ $680.43 per month to Bank of America &nbsp;&nbsp;&nbsp; 4,763.01 &nbsp;&nbsp;&nbsp; &nbsp;<br/>&nbsp;<br/>PAYOFFS - Bank of America <br/>Total Payoff $495,688.64 <br/>Principal Balance to Bank of America &nbsp;&nbsp;&nbsp; 490,995.26 &nbsp;&nbsp;&nbsp; &nbsp;<br/>Interest to 08/01/2009 &nbsp;&nbsp;&nbsp; 5,316.57 &nbsp;&nbsp;&nbsp; &nbsp;<br/>Reconveyance Fee to Bank of America &nbsp;&nbsp;&nbsp; 45.00 &nbsp;&nbsp;&nbsp; &nbsp;<br/>Recording Fee to Bank of America &nbsp;&nbsp;&nbsp; 9.00 &nbsp;&nbsp;&nbsp; &nbsp;<br/>Pro Rata MIP to Bank of America &nbsp;&nbsp;&nbsp; 608.16 &nbsp;&nbsp;&nbsp; &nbsp;<br/>CR for impound account to Bank of America &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; 1,285.35 <br/>&nbsp;<br/>MISCELLANEOUS: <br/>EST for SIGNING/NOTARY FEE &nbsp;&nbsp;&nbsp; 175.00 &nbsp;&nbsp;&nbsp; &nbsp;<br/>&nbsp;<br/>_______________________________________________________________________________________________________ <br/>&nbsp;<br/>ESTIMATED BALANCE DUE ESCROW &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; $11,115.67 <br/>&nbsp;<br/>ESTIMATED TOTALS &nbsp;&nbsp;&nbsp; $514,467.52 &nbsp;&nbsp;&nbsp; $514,467.52 <br/>&nbsp;<br/>__________________________________________________________ Mon, 10 Aug 2009 21:51:00 GMT http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ 2009-08-10T21:51:00Z Good luck and thanks to anyone ... http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ Good luck and thanks to anyone who can respond to this long winded question. Sorry it is so detailed.<br/><br/>OK so here is the deal as it was explained to me. We were trying to close at the end of June but couldn't get everything wrapped up in time so we closed closer to mid-July.&nbsp; We also were told that because the payment or the July <a href="http://www.zillow.com/mortgage/">mortgage</a> payment wasn't made <strong>(we were advised not to post this payment to the bank as we were closing at such a close proximity to this date)</strong> that we should just pay the July payment as part of the closing so as not to confuse B of A with a payment that might not post in time so close to the closing. We waited to pay the July payment thinking that we wouldn't have to make it because of a one month lag when our <a href="http://www.zillow.com/mortgage/">loan</a> started over and when our other was paid off. This was one of the advantages that we were touted to us about refinancing. Basically you save a month of payment but really you just get to skip a month before your new loan is implemented.<br/><br/>As it played out we were told that we needed to go ahead and include the July payment as part of the closing so we agreed, understanding that we would now skip the August payment instead of the July payment, and pay the new payment in September for the first time. I did in fact receive the docs from B of A expecting our first mortgage payment in Sept 09.<br/><br/>I called B of A and the <a href="http://www.zillow.com/directory/lenders/">mortgage broker</a> to confirm that we would receive back the interest paid for July in the mortgage payment at a pro rate for July. They both explained that it would be around $80 a day and would be for 14 days. The doc has been edited to delete personal info below, but you will see that it reflects that we paid $5316 in interest to 8/1/09. As I understood it this was for June and July, and when I checked our bank statement we actually made the June payment directly to the bank and skipped only July. I was told that because we closed and all docs were finalized with the bank of 7/17 we would get credit as explained earlier, totaling around $1100 dollars for the 14 days of interest.<br/><br/>I spoke to the mortgage broker after the deal was completed and we were still both on the same page as he said to expect the $1100 dollars back within a couple of weeks. Same went for the bank.<br/><br/>I received a check for $140 dollars 2 weeks later and when I called the bank they had no information regarding the credit for the money back. They did say that we would receive another check for around $210 dollars but nothing more. I contacted the broker and he stated that we would now NOT be getting this money back because of our LTV ratio being too high 97.5, and that the bank couldnt eat that interest for July for this reason (not his exact words, but basically what he stated).<br/><br/>I am confused now as to why we paid interest totalling $5316 if it was for ONLY the July payment and he was aware of this at the time. If we were paying for the August payment all along then I feel we were duped because August was supposed to be skipped in the first place. Did we get duped or did we double pay July? And if we did and the loan was bought out through 8/1, did we overpay? Also, if he didnt know about us having to pay the August payment then if it is part of the $5316 and he saw the docs then how could he not know? It almost seems he knew about the situation with us NOT getting the money back for the time period and having to pay the August payment but didnt say anything. <br/> Mon, 10 Aug 2009 21:51:00 GMT http://www.zillow.com/advice-thread/How-come-I-don%27t-get-my-interest-back/266502/ 2009-08-10T21:51:00Z