Q&A: Can you be late on your current loan during process of refinancing w/another mortgage company?

Question by ski w: Can you be late on your current loan during process of refinancing w/another mortgage company?
My current loan will be 30 days late in 8 days. I do not want to pay current lender another payment! Will the company I’m working on refinance with check my credit anymore before closing the loan?

Best answer:

Answer by Miss V
Yes. You’ll have to complete your refinancing before the 8 days is up.

Know better? Leave your own answer in the comments!

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5 Responses to Q&A: Can you be late on your current loan during process of refinancing w/another mortgage company?

  1. Angie says:

    You have to continue to pay on your current loan until your new loan starts. Otherwise your current lender may refuse to release your loan obligation on your property because you are not up-to-date.

  2. Skip says:

    You should not be late and you should have been told by your loan consultant or closing agent if it was OK to miss a payment to your current lender.

    There is a possibility that the lender’s underwriter will check your credit report one more time if they have not already. This should not cause a huge concern,but should have been addressed by your mortgage consultant.

    Give him/her a courtesy call to check and see if things are going OK and reaffirm that closing is as scheduled and if you should make this mortgage payment to escrow since the mortgage payment is so close to your closing.

    I hope this has been of some use to you, good luck.

    “FIGHT ON”

  3. mark says:

    The current lender is going to be paid anyway. The need to calculate a close-out amount for you under the terms of the loan.

    Making a payment will simply change that amount slightly.

    If your loan is already late , and you dont have the lenders approval then you should have already made a payment.

  4. Jeremy R says:

    Yes, you can be late on your current mortgage and still refinance. The downside to this is, if you do not close in 8 days you will have a 30 day mortgage late on your credit report which will impact your new interest rate. Most conventional lenders will allow you to be up to 59 days late on your mortgage payment, anything over that and you will have to make a payment or two to be within the 59 days. If you are unable to make the payment you will be looking for a hard money lender who will really give you a high interest rate.

  5. novastarbanker says:

    You have to keep current no matter what. I am a senior loan consultant, and have seen many times when people thought it would be okay not to pay prior to closing and in some cases it has actually killed the deal. If you go thirty days late, it is reported and shows up on your credit report. A lender WILL update your credit prior to closing your loan to make sure your status has not changed from the time of application. Some lenders will withdraw your approval based on their particular guidelines. As long as you pay, the amout will be in your favor when you close, but you put yourself at a horrible risk by not paying the current lender, and going 1×30 (thirty days late). You also have to take into consideration that on a refinance, your loan will not fund until your Right Of Recision period is over, (72 Hours from closing) Which means that all payoffs included in the refinance will not be sent out until four days after you close and the new loan funds. I would highly recommend you pay the last payment.

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