Dave, I’ll have your hud-1 (settlement statement) this afternoon with the amount you’ll be getting back at closing for this cash-out refinance.  I assume you made your January payment.  Definitely don’t send your February payment, the interest for February will be collected at the table.  Because you have a 3 day recission period, your loan won’t actually fund until Monday February 4th since you are closing Tuesday January 28th.  It can’t fund on a Saturday so it carries over to Monday.

You have 2 options:
- because you fund February 1^st, the lender will also collect for all of March’s interest and your first payment will be April 1^st.  This means a little less $ at the table for you now, but your first payment has been delayed a month.
-
Or
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- we can do an “interest credit” where February 1^st is considered January 35th, and this way your first new payment will still be March 1^st.  A little more $ for you at the table now (1 months’ interest).   Please let me know which way you’d like us to work it up, and I’ll shoot you the settlement statement as soon as I get it for your review. 

Tags: make sense to close at end of month, what's an interest credit

This entry was posted on Friday, January 25th, 2008 at 11:31 am and is filed under 1) Questions for Loan Officer, 2) General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.