Escrow Tips When Refinancing
By refinancing, you will most likely benefit from a lower interest rate. No matter what type of mortgage you have, you will have a monthly payment. With standard first mortgages, the payment is made up of principal, interest, insurance, and property taxes. Out of those amounts, your insurance payments and taxes will be held in a trust account with the lender, which is known as an escrow account, or impound account.
If you decide to refinance your house, you will have to decide what you want to do with the extra cash that you have in your previous escrow impound account and if you should have an escrow impound account with your new loan.
When you decide to refinance a loan, your original escrow impound account will remain with the original loan. The escrow funds cannot be transferred to the new loan, even if you are using the same lender. All of the insurance and property tax payments that you have made up to the date that you refinance will be returned to you.
Since the old escrow impound funds will be sent to you after the refinance is done, it is typically very hard to use the held escrow funds from a previous loan and apply it towards your new impound amount.
For all of your escrow needs when looking to refinance your home, contact Eastland Escrows in Covina, California.