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FHA mortgage refinance question

post #1 of 10
1/20/10 at 6:26pm
Thread Starter 
Just curious on the interest for the end of the month....

I have a 30 year mortgage with Citimortgage at 6.25%. I just did a refi for a 30 year with Wells Fargo at 4% - saved me $441 a month!!
Both are FHA's...
(I know I got clobbered in the MotherF**ing MIP...)
Anyways, I had to close on the 18th (since I had a rate lock in place which was going to fall off otherwise), and then I have a 3 day rescission period.
So my new mortgage is scheduled to start 1/22. So I pay interest for the 10 days until 2/01 to WF it's listed on my HUD-1).
My payoff note from Citi is dated 2/01, so will they refund me those 10 days worth of interest since they're getting paid 10 days early?
Or does the FHA allow them to keep that interest?
Thanks,
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post #2 of 10
1/20/10 at 6:41pm
Your closing docs should include payment to Citi from the date of closing. I would ask, since mortgages are paid in arrears. Prepayment of interest to the paid-off lender seems fishy. We recently did an FHA refi (also getting clobbered on the UFMIP) and I don't recall paying off the interest on the first mortgage (read: the mortgage being refinanced) beyond the date of the closing.
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post #3 of 10
1/20/10 at 6:52pm
IIRC FHA mortgages are always paid to the end of the month, so no, you probably won't get any refund. I know there was talk of changing this "rule", but it seems to me the change never happened.
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post #4 of 10
1/20/10 at 7:26pm
Quote:
Originally Posted by whusurdadi View Post
Just curious on the interest for the end of the month....

I have a 30 year mortgage with Citimortgage at 6.25%. I just did a refi for a 30 year with Wells Fargo at 4% - saved me $441 a month!!
Both are FHA's...
(I know I got clobbered in the MotherF**ing MIP...)
Anyways, I had to close on the 18th (since I had a rate lock in place which was going to fall off otherwise), and then I have a 3 day rescission period.
So my new mortgage is scheduled to start 1/22. So I pay interest for the 10 days until 2/01 to WF it's listed on my HUD-1).
My payoff note from Citi is dated 2/01, so will they refund me those 10 days worth of interest since they're getting paid 10 days early?
Or does the FHA allow them to keep that interest?
Thanks,

How did you get a 4% Rate??
I have a FHA with BOA at 5.75--that was a good rate 18 months ago.
I would LOVE a 4% rate!!
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post #5 of 10
1/20/10 at 9:57pm
Mine is at 5% and I am very pleased. I find it hard to believe someone got a 4% FHA without paying discount points.
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post #6 of 10
1/21/10 at 1:56am
Quote:
Originally Posted by Dakota rube View Post
IIRC FHA mortgages are always paid to the end of the month, so no, you probably won't get any refund. I know there was talk of changing this "rule", but it seems to me the change never happened.

Correct. In the OP's case, whether the loan was paid off on 1/1 or 1/31, 31 days of interest will be added to the payoff. This is why we try to close all our loans where we are paying of an FHA loan with about 7 days left in the month to rake into acct the rescission period and any potential funding issues (I'm a sales director for a mortgage company). If for some reason the loan didnt fund in Jan and was delayed until 2/1, another months of interest has to be added to the payoff.

Also I have to agree with the poster who stated that points had to have been paid. Over the last couple of mos, the lowest zero point rate I've seen us offer was 4.5 or so. But regardless of whether points were paid or not, OP got himself an awesome rate.

Quote:
How did you get a 4% Rate??
I have a FHA with BOA at 5.75--that was a good rate 18 months ago.
I would LOVE a 4% rate!!

I would definitely call BofA and look at a streamline. From what I have seen, BofA offers returning customers phenomenal pricing. With the recent change in streamline guidelines, you wont be able to roll in most of the closing costs (if you do the no appraisal option) but depending on how you structure the loan, costs could be minimal. I know based on todays pricing, we gave someone 5.125 or something like that and we covered all the costs.
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post #7 of 10
1/21/10 at 2:12am
Thread Starter 
Quote:
Originally Posted by dshin View Post
Correct. In the OP's case, whether the loan was paid off on 1/1 or 1/31, 31 days of interest will be added to the payoff. This is why we try to close all our loans where we are paying of an FHA loan with about 7 days left in the month to rake into acct the rescission period and any potential funding issues (I'm a sales director for a mortgage company). If for some reason the loan didnt fund in Jan and was delayed until 2/1, another months of interest has to be added to the payoff. Also I have to agree with the poster who stated that points had to have been paid. Over the last couple of mos, the lowest zero point rate I've seen us offer was 4.5 or so. But regardless of whether points were paid or not, OP got himself an awesome rate.
Fuck.... Another $500 down the drain... I got a 5/1 ARM at 4% (it's a starter house I plan to be out of in 2-3 years) with no points (I could've gotten 3.65% with 1 point, but it didn't make sense cost wise) ....only time will tell...
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post #8 of 10
1/21/10 at 2:26am
Quote:
Originally Posted by whusurdadi View Post
Fuck....
Another $500 down the drain...
I got a 5/1 ARM at 4% (it's a starter house I plan to be out of in 2-3 years) with no points (I could've gotten 3.65% with 1 point, but it didn't make sense cost wise) ....only time will tell...

It is what it is...but still it sounds like you did real well rate wise.
Personally I would have paid the point. if you are in the house for 3 yrs, at 4%, you can view it as you are paying 4 "points" per year....so at the end of yr 3, you will have paid 12 points.
If you paid the point and got 3.625, you are paying 4.625 pts in year one (3.625 rate and the one discount point), and 3.625 pts in yrs 2 and 3...so a total of 11.875 pts for the 3 yrs. Plus the discount pt is tax deductible (amortized over 30 yrs...but the un-deducted portion is deductible when the loan is paid off i.e when you sell the home since its prepaid mortgage interest)....but then you have more annual mortgage deductions at the 4% rate...so an argument can be made for either case I suppose.
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post #9 of 10
1/24/10 at 8:18pm
FHA mortgage interest is charged in whole months only with no negotiation, pity, remorse or fear on the part of FHA. They can't be reasoned with, they can't be bargained with. I found this out the hard way when I refinanced my FHA to a lower rate conventional 5 year ago or so. When this little detail popped up at closing my mortgage "professional" shrugged her shoulders

I would have spent the $800 on hookers and blow but never got the chance and I'm still bitter.
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post #10 of 10
3/26/10 at 9:12am
Quote:
Originally Posted by whusurdadi View Post
Just curious on the interest for the end of the month....

I have a 30 year mortgage with Citimortgage at 6.25%. I just did a refi for a 30 year with Wells Fargo at 4% - saved me $441 a month!!
Both are FHA's...
(I know I got clobbered in the MotherF**ing MIP...)
Anyways, I had to close on the 18th (since I had a rate lock in place which was going to fall off otherwise), and then I have a 3 day rescission period.
So my new mortgage is scheduled to start 1/22. So I pay interest for the 10 days until 2/01 to WF it's listed on my HUD-1).
My payoff note from Citi is dated 2/01, so will they refund me those 10 days worth of interest since they're getting paid 10 days early?
Or does the FHA allow them to keep that interest?
Thanks,

look this site Mortgage: questions and answers, in search menu enter word "FHA loans".
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