Refinance Question

Hi! Hoping someone can help.

Husband and I are looking to refinance our mortgage for a lower rate.

Would the numbers be worked off what is left of the principal or the original loan amount?

It seemed like the guy at the bank was working off of our original mortgage amount, which doesn't seem to make sense to us. If we've paid off X amount from the original mortgage, why would the refinance loan go back to that original mortgage amount and not just based off of the principal we have left?

Example-if we bought for 100K and have paid off 25K with 75K left, would the new mortgage be based off of the original 100K or the 75K that is left?

Can someone help me make sense of this? haha

Re: Refinance Question

It should be based off of what the new amount of the mortgage would be. We recently refinanced and that's how it works. The new principal amount is the amount we had left to pay at the time of the refi.

Re: Refinance Question

You typically refinance for the amount you currently owe, unless you are trying to cash out some of your equity. Doesn't sound like that is what you are trying to do. I'd get a new broker!

Refinance Question

The refi would be for the amount you currently owe, plus closing costs. But if you want to take cash out, then it would be for a higher amount, depending on how much cash you want in hand

Message edited 6/25/2021 10:05:09 AM.

Re: Refinance Question

They are likely rolling in your closing costs to the loan amount to make it seem like a no out of pocket cost better deal.

Your escrow will definitely add to the total (although after you close you should get a large check back from your old mortgage escrow balance).

Refinance Question

The refi is on the balance of mortgage owed and you can roll the closing costs into it. You can also take cash out on the equity in your home.