When you choose to refinance a loan, the original escrow account remains with the previous loan. Unfortunately, these funds cannot be transferred to new loans, even if they are with the same lender. Any property taxes and insurance you have made up to that date will be returned to you within 45 days by bank transfer or check. If you're refinancing your mortgage with your current lender, your escrow account may remain intact.
This means that the funds you had in your account before refinancing will remain in the original escrow account. With that, you shouldn't expect to receive an escrow refund unless the property taxes or insurance associated with your property have changed dramatically. When you complete refinancing with a new lender, the new loan servicer will create a new escrow account for you. However, if you are refinancing with another lender, your current escrow account will be closed and you will receive a check for the remaining balance within 30 days of the liquidation of your previous lender.
Because the funds will be sent to you at a later date, it is generally not possible to use the escrow funds held from a previous loan to be used in your new escrow account for the refinanced loan. The deadline can be any month of the year, but during this review, loan servicers verify that your escrow payments match the bills paid from this account. To do this, you'll need to raise more funds at the time of closing to deposit funds into your new escrow account and, depending on the time of year you're refinancing, the lender may require a significant amount of escrow taxes to be paid in advance. When refinancing a mortgage, the existing escrow account is generally closed and a new one is opened specifically for the new loan.
Upon closing, the lender orders the escrow agent to collect a specific amount of installment payments to establish reserves. A escrow account requires that you send payments for certain expenses each time you send mortgage payments to the lender. With Citrus Heritage Escrow by your side, you can be sure that when you receive your settlement check, you'll get the most out of the sale or purchase of your home. Some lenders require you to open an escrow account in order to grant you the loan; others will allow you to pay the bills yourself. This transaction may come into play if you have canceled your mortgage and there is still a balance left in your escrow account.
Your escrow officer follows the instructions in your contract, coordinates deadlines and gathers all necessary documentation. When deciding on an escrow account for your refinanced loan, keep in mind that without an escrow account, closing costs will generally be lower because you don't deposit funds for future property tax or insurance payments in advance.
