Refinancing your current loan - getting ready for closing

You’ve made the decision to refinance your mortgage. Maybe to lower your interest rate, get cash back, or maybe a shorter term.  Regardless of your decision, it’s an exciting time.  Here are a few tips on what to expect at closing.

Where and When is Closing?
  • The new lender will usually set up the closing and choose the title company, unless the borrowers indicate a preference to use their original closing attorney or another firm.
  • Because there is no sales contract with a closing deadline, the lender has more control over the closing date, based on when the new loan is approved and locked in.
  • Borrowers need to stay updated on the projected closing date, so that they can keep their current mortgage payments paid.
Who must attend closing?
  • All owners on the title must attend closing, even if added to the title after the previous closing and even if not on either loan as a borrower.
  • Powers of Attorney can be used when a party can not attend closing in person but requires lender approval
What do the borrowers need to do?
  • Work with your lender in providing requested documentation on a timely basis to expedite your closing date.
  • Once your closing date is confirmed, discontinue any automatic payments on your existing mortgage, once the current month’s payment has been made.
  • If you are also paying off a home equity loan, discontinue any draws, checks, or charges on this account, so that we can get an accurate payoff to close the account.
What is the 3-day right of rescission?
  • If the borrowers are refinancing their principal residence, federal law requires that they have 3 business days between the day of signing their refinance paperwork and finalizing the transaction. The 3 days begin on the day after the signing and do not include Sunday or any banking holiday.
  • Until midnight of the 3rd business day after signing, the borrowers have the legal right to rescind the transaction in its entirety.
  • This right to rescind does not apply to purchases or investment/rental property refinances.
  • If cancelled, the borrowers resume their payments with their existing lenders.
What happens after closing?
  • Borrowers do not receive a new deed to the property, unless a borrower was added or removed in connection with the refinance (for instance with a new spouse or in a divorce situation).
  • Unless there has been a new deed to change the title, borrowers do not need to reapply for the Homestead Exemption.
  • Borrowers should retain their original Owner’s Title Insurance from their purchase closing, because no new Owner’s Title Insurance is charged or issued in a refinance (just a new Lender’s Title Policy).
  • If not already done, borrowers should discontinue any automatic payments on their previous mortgage, even though it has been paid off.
  • Borrowers need to confirm their method of payment (paperless or check) and beginning due date for the new mortgage payment. Many loans are transferred to a different lender before the first payment date.