If you decide to refinance the mortgage on your home here in Delaware, you’ll need to be represented by an attorney. Our firm has been helping clients with their refinancing settlements for more than 25 years. If you’re looking at this website, you’re probably thinking about refinancing. Here are a few things we’d like you to know.

Once you’ve gone to settlement, there’s a mandatory 3-day right of rescission. This gives you the opportunity to cancel the transaction during this 3-day period. If you expect to receive cash back at settlement, keep in mind that your lender cannot make the funds available until the right to cancel period is over. Because you won’t be receiving the money on the day of settlement, don’t plan on paying any bills until four days later.

Speaking of the right of rescission, if you cancel the transaction within the 3-day period, your lender is required by federal law to refund to you any money you’ve paid them or anyone else in connection with this transaction. Even if you signed a document agreeing that a fee you paid in advance is non-refundable, that agreement becomes null and void if you cancel, and that fee will have to be refunded to you.

Your attorney will use some of the funds from your lender to pay off your old mortgage. If that old mortgage is an FHA mortgage, the scheduling of your settlement is important. On an FHA mortgage, you can only prepay on the first day of the month. This means that if your old mortgage company receives the check on the 2nd day of the month, for example, they will keep charging you interest until the first of the following month. In that scenario, you will be paying interest on your old mortgage and your new mortgage for the same month. Instead, schedule your settlement closer to the end of the month so that the 3-day right of rescission period runs out a day or 2 before the end of the month. This will allow the payoff check to be received by your old mortgage company before the first, and it will reduce the amount of interest you pay at settlement.

Within 30 days after your old mortgage company received the payoff check, they will refund to you the balance in your escrow account. The amount of that balance will usually be on the payoff statement your attorney obtains. You can also check the balance online or by calling your old mortgage company.

Finally, keep in mind that whenever you settle, you will be charged interest from the day the funds are disbursed until the last day of the month. Your first mortgage payment won’t be due until the first day of the second month following your settlement. So, if your funds are disbursed on August 30th, you’ll be charged interest for the last 2 days of August, and your first mortgage payment will be due on October 1st.

To arrange for our firm to assist you with your refinancing settlement, contact us online or call us at (302) 239-1140.