Question by starwarzed: Can someone answer a mortgage refinance question?
When you refinance your home with another mortgage company then the one you have know, who lets them know you’ve gone with another mortgage company? Are there penelties? We are in a sliding rate and are trying to get into a fixed rate. thanks!
Answer by Yoslack
The new mortgage company you are doing a refinance will let them know. They will get a payoff from the old mortgage company and pay it off at closing. The title company is responsible for sending out the payoff to your old mortgage company. There will be a penalty if you have a prepayment penalty on the loan you have with the old mortgage company.
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When you refinance, the full amount due on the first mortgage is paid to the lender from the proceeds of the new mortgage at closing.
As far as penalties go, you would need to check the terms of the first mortgage to see if there are any pre-payment (early termination) penalties involved.
the new mortgage company will order the PAYOFF ….usually done by the processor (the title company conducts closing not loan services)
when they order the payoff the old mortgage company will let the new lender know if there is a prepayment penalty. Normally, you can find out yourself if you call them or view your old loan documents.
I’m sure your old lender will know that you’re refinancing when they see you have applied for a mortgage. You should be expecting calls from other lenders as the credit bureaus sell your information when you apply for a mortgage (called ‘trigger leads’).
make sure to get on your old lender about the payoff. they usually take their time as they’re hoping to ‘retain’ your mortgage with them instead of you going to a new company.