Home Selling in 92083>Question Details

Moevanna11, Home Seller in 92083

I recently sold my house and will be closing on the 28th. What happens if I don't make my final mortgage payment (due on the 15th)?

Asked by Moevanna11, 92083 Tue Oct 6, 2009

I believe it takes 30 days to hit my credit report so will it ever hit since the loan will be paid in full as of the 28th? What are the ramifications of not making the last payment. It seems like a waste since I know I'll be paying off the mortgage a couple weeks later. Any insight is appreciated.

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Answers

7
Once the escrow was opened for your purchase, your loan officer would have ordered a "payoff" from your mortgage bank. The payoff will include the interest you owe on your existing mortgage up to close of escrow on the 28th. Since you are paying off the mortgage before the end of the month, it won't be reported as past due.

You are right ... a mortgage company does not report a 30 day late payment until AFTER the end of a given month.

Congratulations on your sale!

Barbara
1 vote Thank Flag Link Tue Oct 6, 2009
Talk with your escrow officer and ask them to contact the lender regarding timing of the payoff.

The same thing can happen with property taxes. Coordination with escrow in advance can solve these issues.
0 votes Thank Flag Link Wed Oct 7, 2009
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
Hi,

Call your mortgage lender and ask them what to do and how any reimbursement works.

Best regards,

Mark and Kari Shea
San Diego Real Estate Experts
Foreclosure & Investment & Short Sale Specialists,
Development Opportunities & Traditional Real Estate
0 votes Thank Flag Link Tue Oct 6, 2009
I would make the payment. What if something happens and yo close beyond the 28th...or the buyer drops out...too many things can go wrong, and if you "overpay" you will get your money back.

Good luck,
Joan Wilson (Realtor, SRES, Ecobroker)


California Cool 4 Sale
Prudential California Realty
Direct Phone: 760-757-3468
Fax: 760-946-7894
JoanWilson@prusd.com
License # 01341483

It is my Goal to Increase the Success and Profitability of Those I Serve
0 votes Thank Flag Link Tue Oct 6, 2009
Hi Moevanna11,

This question gets asked a lot from sellers and sometimes when a homeowner is refinance their existing mortgage. Your lender will most likely charge the late fee if not paid by the 15th. You mentioned you are scheduled to close escrow on the 28th. As it gets closer to that date you'll want to keep a close eye on anything that might delay the close a day or two or even a week. Sometimes there could be a slight delay waiting on the Buyer's new loan to fund. Hopefully, your agent keeps in close contact with the Buyer's agent.

If it looks like escrow is going to be extended beyond the 30th, I would go ahead and make the payment. Otherwise, the Lender may consider it a 30-day late and report it to the credit bureaus as such. Good luck and hope this helps! You'll also want to notify your escrow company if you do need to make a last minute payment. They will be able to make any final adjustments at closing.
0 votes Thank Flag Link Tue Oct 6, 2009
Moevanna11

Usually, loan companies give a grace period of 10 days from the time the mortgage payment is due before they consider a payment "late". And I doubt seriously that being delayed by a few days is going to impact your credit --- not unless you are habitually tardy with your payments that the lender has had to send payment reminders.

But since this loan will be paid off at close of escrow, this may already be taken into consideration in your final seller statement of proceeds.

Speak with your escrow officer who is handling the escrow. If you haven't already received your estimated seller statements, this is one of those details that is itemized on that statement. Your escrow officer can guide you on whether you still need to make that last payment, or if they can simply make the necessary entry to pay off your mortgage so you won't have to worry about making the last payment. Do note that the payment due will be prorated and paid from your seller proceeds up to the time you close escrow,

I've had some sellers ask me this...and i usually advise them to go ahead and make the mortgage payment because we never really know when the escrow will close. So if there's an overage in payment, this will be credited back to the seller.

If you're worried enough to ask this question, why not have that peace of mind, and go ahead and pay it?


Good luck, and congratulations!
0 votes Thank Flag Link Tue Oct 6, 2009
Moevanna11:

The title company (or closing company) will calculate the exact amount you owe and will factor in any payments you do or do not make. You should contact them and ask them whether or not you should make your payment.

Bottom line: you will be required to pay for every day you own your home and WILL NOT pay for any days after escrow closes. If you overpay, you will get a credit either from the title company or your existing lender.

If you choose not to pay in the hopes that you can somehow pay less, you will actually have to bring additional funds to the table to close the transaction. Banks have done this too many times to let it slide, and you are certainly not the first person who has had this question. Your existing lender will need to be paid in full or they will not release the title to your home to be transferred to the new buyer.

.
0 votes Thank Flag Link Tue Oct 6, 2009
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