If I close on my new home on November 26, will my first mortgage payment will be January 1?

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On an FHA loan, does that mean that I will have to pay the interest for November 26-30 at closing, then my first mortgage payment on January 1? I’d rather not have an FHA loan, but if I do a conventional loan, I’ll get 100% financed, with 2 mortgage companies financing the 80% part and the 20% part separately. (I don’t have the 20% down payment) From what the loan officers tell me, interest rates for a second mortgage loan are at the very least 9% right now, so I’ll save more with an FHA loan than the conventional, even after paying PMI. I dislike escrow accounts, but oh well….what was my question…yeah, 1st mortgage payment due in Jan?

My current mortgage has a PMI of $ 50. With the refinanced mortgage, the bank is more than doubling the PMI to $ 110. The refinanced amount is significantly lower ($ 125,000) than the original mortgage loan ($ 135,000). I am trying to contact the bank to understand why the PMI has been increased and it has been in vain. I have to sign the papers for closing tomorrow and I think if the bank does not bring the PMI down to $ 50 or close, then I will not sign the papers. What can happen if I do this? What else can I do?

Thanks a lot in advance!
I also took 0.5 pt which cost me $ 625. If I were to walk away do I still have to pay the point fees and the attorney fees for both sides? My attorney represents the bank too.
Yes I still save $ 100 per month from my current mortgage. But if the PMI was kept as the original then I would save about $ 150 per month, which is significant.
The previous LTV was 98.5% and the current LTV is about 94.7%. Does that drop of 3.8% account for doubling the PMI? Is there a way to have the PMI reduced?

6 Comments
  1. Reply
    curmudgeon
    February 1, 2011 at 7:56 pm

    yes, yes, and yes.

  2. Reply
    Faye
    February 1, 2011 at 8:42 pm

    Your first pmt will be due in Jan. You will only pay interest thru the end of Nov. With mortgages, interest is paid a month in arrears so when you pay your mortg in Jan , you will be paying for Dec. interest

  3. Reply
    wildes_c
    February 1, 2011 at 9:09 pm

    It’s basically up to the mortgage company, however more than likely January 1st would be the first payment.

  4. Reply
    Patrick G
    February 1, 2011 at 9:31 pm

    yes

  5. Reply
    Tubby Rower
    February 1, 2011 at 10:12 pm

    You will have to pay out of pocket a few of the expenses that usually get charged at closing. These expenses are things such as appraisal fee, credit reporting fees, loan application fee, etc. Other than that, you should be able to walk away.

    As to why your PMI has gone up, the economy has taken a downturn and the banks are very reluctant to lend any money especially in mortgages where PMI is needed. As you may know, PMI is insurance for the banks paid by you. The insurance companies have raised their rates because they’ve been paying out claims.

  6. Reply
    David Z
    February 1, 2011 at 10:25 pm

    Well the bank is not in control of pmi rates. those premiums are going to a insurance company. Insurance rates change all the time so this is not unexpected. Especially given the big losses these mortgage insurers have taken. I am sure they have changed their pricing from previous years when defaults were a lot lower.

    You have to factor in increase in PMI with reduction in interest rate to determine if refi is a good deal. PMI has to be considered part of your borrowing costs. So yes interest rate is going down but PMI is a little higher. Is it still a positive for you to refi?

    Another thing to consider is your home’s value may have fallen. Has your loan to value ratio increased because of falling real estate prices? LTV % affects PMI rates.

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