Payoffs and Interest in Arrears

[Anonymous]

If I were to get a payoff from my Bank on Jan 15th for closing at the end of the month.  Would my payoff include 30 days of interest or would they also include the month of February because my first payment would not be until March 1st?

[ShanetheMortgageMan]

Not all payoff statements contain the same info.  Some payoffs are only good through that day you ordered them... some will list a payoff amount depending on the day you close, and some will just give an amount if it was paid off today and then a "per diem" charge on how much it would increase if you were to close X amount of days after the payoff request, etc.  If you are paying off a conventional loan you are only charged interest through the day your loan is paid off, no more.

[Anonymous]

Sorry, this was an FHA loan. 

I requested a payoff on Jan 15th for closing date of Jan 26th.  The payoff they quoted was 309,744.  I received my HUD today and it was $311,543.  Wondering why the descepancy?

[ShanetheMortgageMan]

Ah, that is why then... on FHA loans interest is paid on a monthly basis, not daily.  This is why on an FHA payoff it's always best to close at the end of the month to avoid paying double interest.  Was there a reason you were closing today rather than this Friday?

[Anonymous]

I didn't close because of a inaccurate HUD1 so I am relocked and waiting to close at end of Feb.

The reason I didn;t close on last day of month was the 3 day recission period.  That is true of FHA refi's correct?

[ShanetheMortgageMan]

Yup, as long as your FHA loan is on an owner occupied residence the 3 day rescission period on a refinance applies.

[MattH]

---

@ShanetheMortgageMan wrote:
Not all payoff statements contain the same info.  Some payoffs are only good through that day you ordered them... some will list a payoff amount depending on the day you close, and some will just give an amount if it was paid off today and then a "per diem" charge on how much it would increase if you were to close X amount of days after the payoff request, etc.  If you are paying off a conventional loan you are only charged interest through the day your loan is paid off, no more.

---

On the Wells Fargo website (they hold my mortgage since WAMU decided at the height of the boom to sell most of their boring old prime mortgages and go after subprime stuff) when one does a payoff inquiry there's a drop-down dialog box to pick the date as of which the payoff will be computed.  When I had a car loan with Chase, the payoff would say, "X dollars until [date] then Y dollars more per day after that until the payment reaches us."