LenderFi Refinance - Closing Amount Higher than Principal Amount?

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Topic Author
schleprock117
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Joined: Sun Jan 28, 2018 5:11 pm

LenderFi Refinance - Closing Amount Higher than Principal Amount?

Post by schleprock117 »

Hi Fellow Bogleheads,

I will be closing my first ever refinance tomorrow with Lenderfi. The loan amount on the closing document is higher than my principal amount with my current lender Wells Fargo. Is this typical? I spoke with my Loan Officer, and he told me that it is because the payoff amount on the loan is higher than the loan amount and that it includes prepaids. Is this correct? Info is below

Original Loan
3.875% 30 year fixed. I am 4 years into the loan.
Current Balance - $307,000

Refinance Amount
2.875% 20 year fixed. No closing cost
Loan amount $308,300
A+B+C = $1101
E+F+G+H = $161.28
J = -$140.49
Closing Cost Subtotals (D+I) = $1262.28
Lender Credits = -$1402.77
Closing Costs = -$140.49
Cash to Close (to borrower) = $121.87

Wells Fargo payoff amount = $308,318.62
dandinsac
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Joined: Sat Jul 30, 2016 8:34 am

Re: LenderFi Refinance - Closing Amount Higher than Principal Amount?

Post by dandinsac »

I had a similar experience. When I refinanced, I ended up skipping a payment. If I would have applied that to my new loan as a prepayment, the balance would have been in line with the previous loan.
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galawdawg
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Location: Georgia

Re: LenderFi Refinance - Closing Amount Higher than Principal Amount?

Post by galawdawg »

schleprock117 wrote: Wed Jun 24, 2020 2:18 pm Hi Fellow Bogleheads,

I will be closing my first ever refinance tomorrow with Lenderfi. The loan amount on the closing document is higher than my principal amount with my current lender Wells Fargo. Is this typical? I spoke with my Loan Officer, and he told me that it is because the payoff amount on the loan is higher than the loan amount and that it includes prepaids. Is this correct? Info is below

Original Loan
3.875% 30 year fixed. I am 4 years into the loan.
Current Balance - $307,000

Refinance Amount
2.875% 20 year fixed. No closing cost
Loan amount $308,300
A+B+C = $1101
E+F+G+H = $161.28
J = -$140.49
Closing Cost Subtotals (D+I) = $1262.28
Lender Credits = -$1402.77
Closing Costs = -$140.49
Cash to Close (to borrower) = $121.87

Wells Fargo payoff amount = $308,318.62
Where did you get the "current balance" amount you listed above?

If you got it from your June statement, the payoff amount will include the principal balance PLUS interest which accrues daily from June 1 through the date WF will receive the payoff, which is likely scheduled for Friday or Monday. It may also include a fee charged by WF to record the satisfaction of deed with your county.

Also, assuming you currently have an escrow account with WF for property taxes and insurance, you'll get a refund from WF for the balance in the escrow account which should arrive within thirty days of the date WF receives the payoff. :moneybag
Last edited by galawdawg on Wed Jun 24, 2020 4:53 pm, edited 1 time in total.
Topic Author
schleprock117
Posts: 42
Joined: Sun Jan 28, 2018 5:11 pm

Re: LenderFi Refinance - Closing Amount Higher than Principal Amount?

Post by schleprock117 »

Yes, it is from the June statement.

Got it. Just want to make sure this is something normal. Do you recommend I make my upcoming payment that's due on 07/01 but not late until 07/15? Again, I'm signing the closing docs tomorrow.
Silk McCue
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Joined: Thu Feb 25, 2016 7:11 pm

Re: LenderFi Refinance - Closing Amount Higher than Principal Amount?

Post by Silk McCue »

I would call Lenderfi now and ask them since they are in CA. Definitely want to make certain it is all clear before you decide to make that payment or not.

Cheers
Millennial
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Re: LenderFi Refinance - Closing Amount Higher than Principal Amount?

Post by Millennial »

schleprock117 wrote: Wed Jun 24, 2020 5:36 pm Yes, it is from the June statement.

Got it. Just want to make sure this is something normal. Do you recommend I make my upcoming payment that's due on 07/01 but not late until 07/15? Again, I'm signing the closing docs tomorrow.
Do not make your 7/1 payment. The payoff amount is $308k because that includes the interest you will accrue between June 1 and whenever the payoff is (and usually a little more, as they typically request a payoff statement for a few days after closing to be safe) and all principal. Your 7/1 payment also includes June interest and more principal, neither of which you'll owe on 7/1.

You will likely get a small settle up refund from your existing lender in a few weeks, for a couple days interest. Maybe not if they time it perfectly. If you pay your 7/1 payment plus your payoff you will be way over, and get a large refund in a couple weeks.
jimmy2040
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Re: LenderFi Refinance - Closing Amount Higher than Principal Amount?

Post by jimmy2040 »

galawdawg is right. the new loan amount includes interests and things. Wells will write you a escrow disbursement check if there are left overs.
Topic Author
schleprock117
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Joined: Sun Jan 28, 2018 5:11 pm

Re: LenderFi Refinance - Closing Amount Higher than Principal Amount?

Post by schleprock117 »

Makes sense. Thanks ya'll!
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galawdawg
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Location: Georgia

Re: LenderFi Refinance - Closing Amount Higher than Principal Amount?

Post by galawdawg »

schleprock117 wrote: Wed Jun 24, 2020 5:36 pm Yes, it is from the June statement.

Got it. Just want to make sure this is something normal. Do you recommend I make my upcoming payment that's due on 07/01 but not late until 07/15? Again, I'm signing the closing docs tomorrow.
No, don't make the July payment. By then the loan with WF will be paid off. (Unless of course something extraordinarily unusual happens to stop your refinance and you end up keeping your current loan with WF).

Most likely you won't actually make a mortgage payment in July, your new payment will probably be due Aug 1. But, you should get information on making your first payment on the new loan with your closing paperwork.
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BrandonBogle
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Re: LenderFi Refinance - Closing Amount Higher than Principal Amount?

Post by BrandonBogle »

schleprock117 wrote: Wed Jun 24, 2020 2:18 pm The loan amount on the closing document is higher than my principal amount with my current lender Wells Fargo. Is this typical?
...
Refinance Amount
2.875% 20 year fixed. No closing cost
Loan amount $308,300
...
Wells Fargo payoff amount = $308,318.62
I'm not seeing what you are saying here. The loan amount just about matches the payoff amount.
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galawdawg
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Location: Georgia

Re: LenderFi Refinance - Closing Amount Higher than Principal Amount?

Post by galawdawg »

BrandonBogle wrote: Wed Jun 24, 2020 6:35 pm
schleprock117 wrote: Wed Jun 24, 2020 2:18 pm The loan amount on the closing document is higher than my principal amount with my current lender Wells Fargo. Is this typical?
...
Refinance Amount
2.875% 20 year fixed. No closing cost
Loan amount $308,300
...
Wells Fargo payoff amount = $308,318.62
I'm not seeing what you are saying here. The loan amount just about matches the payoff amount.
OP was asking why the $308,318.62 payoff amount is higher than his current loan principal balance with Wells Fargo
which is $307,000 according to his first post.
schleprock117 wrote: Wed Jun 24, 2020 2:18 pmOriginal Loan
3.875% 30 year fixed. I am 4 years into the loan.
Current Balance - $307,000
The loan amount you highlighted in your post is for his new loan after the refinance.
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BrandonBogle
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Re: LenderFi Refinance - Closing Amount Higher than Principal Amount?

Post by BrandonBogle »

galawdawg wrote: Thu Jun 25, 2020 5:11 am
BrandonBogle wrote: Wed Jun 24, 2020 6:35 pm
schleprock117 wrote: Wed Jun 24, 2020 2:18 pm The loan amount on the closing document is higher than my principal amount with my current lender Wells Fargo. Is this typical?
...
Refinance Amount
2.875% 20 year fixed. No closing cost
Loan amount $308,300
...
Wells Fargo payoff amount = $308,318.62
I'm not seeing what you are saying here. The loan amount just about matches the payoff amount.
OP was asking why the $308,318.62 payoff amount is higher than his current loan principal balance with Wells Fargo
which is $307,000 according to his first post.
schleprock117 wrote: Wed Jun 24, 2020 2:18 pmOriginal Loan
3.875% 30 year fixed. I am 4 years into the loan.
Current Balance - $307,000
The loan amount you highlighted in your post is for his new loan after the refinance.
I hilighted Wells Fargo’s payoff amount, which is $318.62 more than the new loan amount. If the Op wonders why that amount is different than the outstanding balance, why ask about the new lender why their refi is enough to pay off another loan and not ask WF why the payoff is that amount?

I know why, because the July payment isn’t reflected in the payoff quote. But regardless, this isn’t a question for the new lender, but the old one.
Topic Author
schleprock117
Posts: 42
Joined: Sun Jan 28, 2018 5:11 pm

Re: LenderFi Refinance - Closing Amount Higher than Principal Amount?

Post by schleprock117 »

Yep, since it was my first time refinancing, I was confused Anyway, got it all sorted out. Thanks y'all!
Flyer24
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Re: LenderFi Refinance - Closing Amount Higher than Principal Amount?

Post by Flyer24 »

Thread moved to Personal Finance.
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