REFINANCE
Mortgage Brokers, Lenders, and Borrowers rely on us daily to coordinate and solve issues
What is Refinance?
Refinancing is the process of replacing an existing mortgage with a new loan. Typically, people refinance their mortgage in order to reduce their monthly payments and lower their interest rate. Additionally, some people need access to cash in order to fund home renovation projects or paying off various debts, and will leverage the equity in their house to obtain a cash-out refinance.
Why do we need to go through escrow?
The parties involved in a refinance transaction include the homeowner, the current mortgage lender, the new lender, and the escrow company which oversees the entire process. Escrow is here to ensure the property is free of any liens, unpaid loans, or back taxes that may have accumulated since the original mortgage was issued and to clear uncertainties on title. After the new loan has been finalized, new lender relies on escrow to payoff the current mortgage and outstanding debts, as well as to disburse funds to the homeowner.
Because there are many potential issues that might affect the refinance process, it is very important to work with an experienced escrow officer who can handle complex refinance transactions and address problems before they can delay your closing. We are here to guide you through every step of the way to maximize your savings with your new mortgage and to make your loan refinance as easy as possible.
Overview of the escrow process
New lenders receive loan applications and reach out to escrow company to get the refinance started, escrow company then prepare instructions and ensure all documents are correctly executed. Additionally, payoff demand from the original lender will be ordered as well as documentation needed to clear any outstanding liens. Once the new loan is finalized, escrow requests funding from the new lender and instructs title company to record necessary documents as well as payoffs the old mortgage lender by wire transfer, the homeowner will stop paying interest on the old loan when the wire is received. (If the original lender does not accept wire transfers, the title company will overnight a check and the homeowner will have to pay interest until the lender receives the payoff check.)
Once the documents are recorded with the County Recorder office, the new mortgage is official and escrow will disperse funds and close escrow based on the instructions.