VA Jumbo Loans Information
Skipping house payments although tempting at times is generally not recommended due to the expensive late fees and damage they causes to a borrower’s credit. But when you refinance a home the lender does not require a payment to be made for thirty to sixty days. So the question remains what makes this possible?
Mortgage interest while calculated on a fixed amortization schedule is paid in arrears. This means a current month’s mortgage payment is actually covering the previous month’s interest. When a payoff is ordered on a mortgage being refinanced, the payoff always reflects a higher amount than the balance you see on the mortgage statement. This is because interest is still accruing on a daily basis and not paid down until the following month.
This process creates an opportunity to use the system to your advantage when refinancing a mortgage loan. If you time it correctly it is possible to go a full sixty days without making a mortgage payment and completely above board. The key is schedule the closing of your mortgage somewhere between the 10th and 15th of the calendar month. Most first mortgages are due on the 1st of the month but offer a penalty-free 15 day grace period to make your payment.
Closing the new refinance loan during this optimal time allows a borrower to forgo the current month’s mortgage payment because it is paid off in full. The new loan will start accruing interest right away but the first payment will not be due until the following month, allowing you to skip two full mortgage payments. Make no mistake you are still paying the interest out of closing but it is rolled into the loan and not an out of pocket expense potentially saving you several thousand dollars in cash flow.
Why choose VA Loan Desk?
A division of Belem Servicing LLC DBA Patriot Home Mortgage
Patriot Home Mortgage and VA Loan Desk finances more homes for veterans than any other VA lender in the United States.
Years of experience gives us unmatched expertise that ensures you get the most from your VA benefits.
VA Loan Desk’s vast network of lenders throughout the U.S guarantees you the lowest possible VA loan rate.
Call (866) 881-4396 to talk with a VA Loan Specialist.