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Personal Finances / Buying or Selling a Home


Subject:  Re: Escrow items during refi Date:  1/25/2013  2:28 PM
Author:  Dwdonhoff Number:  124595 of 128887

Hi Wot,

I will explain it [lines] 1002, 1004 and 1320 are paid at the time of the closing because the taxes and HOI requires to have resolved before completing the rate re-finance. If you look a 206 you receive a credit (amount that’s already n your escrow) for prior loan. So Chase has to reestablish your escrow account. Also, when you see your new statement it should reflect the breakdown of escrow and principle.
I still don't see how the numbers add up.

Me neither... sounds like your loan officer is confused, or really poor at communication, or both.

The new lender is not giving you a credit relating to your old escrow account. They may be applying a credit from a rebate due to a premium interest rate (the most likely source,) or due to prepaid per diem interest charges you are making for closing mid-month (although that would be an accounting fallacy as the actual credit would come from the prior lender refuding the partial period you had prepaid on your previous monthly mortgage payment.)

After about 3-4 weeks after you close & fund, the prior servicing company will send you a check reflecting the remaining balance of your old escrow account.

Dave Donhoff
Leverage Planner
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