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Updated almost 5 years ago,
Refinance question - new loan amount is not same as current loan
I am in the process of refinancing my home from 30 years to 15 years.
It's my assumption that the new loan amount will be the same as the previous loan amount. I understand that I need to pay the interest to the current lender until the escrow is closed. I also need to pay the interest for the new lender for the remaining days in that month.
For example - my current loan amount is - 346,000
I am paying the interest for the first 20 days in Feb assuming that loan will be closed on 20th Feb before 1 PM and I will pay the interest for the next 10 days for the new lender in the Month of Feb. All these interests will be based on the loan amount of 346,000.
And the new loan will also start on 346,000 and then I will start paying monthly mortgages from April onwards (in fact it's actually March payment).
However, in my loan documents, my new loan amount is around 348,000. I am not sure why there is a hike of $2000?
Can someone please explain this gap?
All other expenses such as loan cost, etc.. are covered by credits. I am paying from my pocket for an impound account.