• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Sonoma County Mortgages

Contact Us About Mortgage Financing

All financing provided by New American Funding

(707) 217-4000 | Prequalify Now

Search Sonoma County Mortgages

  • Home
  • Purchase
    • How Much Down Payment To Buy A Home?
    • How Much Income You Need To Buy A Home
    • How Much Should I Save For Buying A Home?
      • How Rates Affect Payment
    • No PMI Mortgages
    • FHA Loans
    • Sonoma County Disaster Loans
    • Jumbo Loans
  • Refinance
    • Mortgage Rates
    • Does It Make Sense To Refinance?
      • Get Your Refi Paperwork In Order
    • How To Pay Off Your Loan Faster
    • How To Remove PMI
    • How Lenders Price & Quote Loans
  • Loan Programs
  • Payment Calculator
    • Mortgage Affordability Calculator
  • Blog
  • Videos
  • About SCM
  • About Scott Sheldon

Primary Sidebar

Sonoma County Mortgages is a part of New American Funding

New American Funding - NMLS #6606

Get Your Latest Rate Quote Now!

Do I really skip a mortgage payment when refinancing my home?

May 28, 2013 by Scott Sheldon

Share on Facebook Share on Twitter Share on LinkedIn Share on Email

No,  the payment is actually made through the close of escrow in the form of prepaid interest. Let’s dive into this a little further: when you pay off a mortgage, the lender will add in what’s called prepaid interest on to the current principal balance and the payoff demand will be reflected higher than what the principle balance is because the lender has to account for how many days worth of interest is due for them to get paid off and the subsequent new loan to go into place.

For  example let’s say you have a loan balance of $302,000, your payoff demand comes in at $305,334 additional $3344 is the interest accrued on a daily basis from the time it estimates for them to be paid off. This lender will also prorate this money depending on how quickly the new lender you’re working with on your refinance can get your new loan closed. Using the month of May, let’s say you’ll have no payment to make in the month of June and the first payment on the new loan your refinancing into will not be due and payable until July 1. No payment to make June 1 right? Wrong that payment is made July 1 because all mortgage interest paid is in arrears. That’s right when you make a mortgage payment on the first of the month, it is is for the previous month’s interest due.

No, you don’t really skip a mortgage payment when refinancing, but it feels that way on the pocketbook

This is something to be aware of when you’re doing your next refinance on your primary residence, second home or investment property.

If you’d like to go over some more specific figures on refinancing or getting a complementary mortgage rate quote, start with us online today! Contact Scott.Sheldon@nafinc.com to get started.

Related Mortgage Advice from Scott Sheldon

  • Why Is My Financed Loan Amount On My FHA Loan Bigger?

    Buying or refinancing a home? An FHA loan much like a USDA loan, has two…

  • Mortgage Payment Calculator

    With current mortgage rates still under 5%, do the math, an accurate mortgage payment calculator…

  • Mortgage Sign Art Image
    How Mortgage Interest Works

    Mortgage interest is a double edge sword, on one hand it's a tax-deductible expense, but…

  • Where is The Best Place To Shop Mortgage Rates?

    This is the mother lode question on every consumer's mind seeking mortgage loan financing. Everybody…

Filed Under: Refinance Loans Questions and Answers

Get Sonoma County Mortgages News and Updates in Your Inbox

Footer

SCM on Facebook

SonomaCountyMortgages.com

Connect on Facebook

SCM On Instagram

Follow Sonoma County Mortgages on Instagram

Follow on Instagram

SCM on Zillow

Zillow Reviews for Scott Sheldon, New American Funding

See Reviews on Zillow

Location & Contact

Sonoma County Mortgages and New American Funding are an Equal Opportunity Housing Lender

Scott Sheldon, Senior Loan Officer
NMLS ID# 287389
2455 Bennett Valley Road C107
Santa Rosa, CA 95405
1-707-217-4000
View SCM Map | Email Us!

Map of Sonoma County Mortgages New American Financing Office

View Map on Google

Copyright 2010–2023 SonomaCountyMortgages.com · About Us · Sonoma County Loans · Privacy Policy · Terms Of Use · Legal · Site Map

NMLS Consumer Access © New American Funding. All rights Reserved. NMLS ID#6606.
Corporate Office 14511 Myford Road, Suite 100, Tustin, CA 92780. We at New American Funding take great pride in our customer service and make it our number one priority. We encourage you to contact us for complaint resolution or any post-closing questions you may have regarding the servicing of your loan. We strive to have your experience with New American Funding a stellar one. In the rare case that our service did not meet your expectations, please call our customer care hotline at 1-800- 450-2010, ext. 7100 or you may contact us by email customerservice@nafinc.com. Please leave a detailed message and we will follow up with you no later than the end of the next business day. If you are using a screen reader or other auxiliary aid and are having problems using this website, please call 800-450-2010 Ext. 7100 for assistance.

State Licensing (Opens in New Window) | Privacy (Opens in New Window)
Terms of Use (Opens in New Window) | Electronic Consent Agreement (Opens in New Window)
Opens in new window Opens an external site Opens an external site in a new window