During a VA refinance, processing will need to get in contact with the veteran’s current lender to request a payoff statement on their current VA home loan. A payoff statement of payoff demand is a statement from the borrower’s current lender showing the amount due on a VA loan to be paid off during the refinance by the new lender.
When requesting a payoff statement, the current lender usually charges a payoff statement fee. This is a fee that a lender charges to provide a statement showing the amount due on the loan. The fee varies depending on the lender. Generally payoff statements are received via fax and because of this method of delivery; the current lender can sometimes charge a payoff demand fax fee. The fax fee just like the payoff statement fee varies depending on the borrower’s current lender.
Once the payoff statement is received, processing will look at a number of different things on the statement; first would be the principal balance or note balance. This balance is the original amount that the borrower borrowed minus the principal portion of the borrower’s regular monthly payments and any other payments that were made directly to the principal balance of the home. Next processing would look at the per diem on the loan, this is the daily interest charged on a the VA loan. In addition to the daily interest, you are charged you may also have other fees or amounts due added to the amount owed on your home. Some examples could include: escrow overdrafts, unpaid late or legal fees, forced insurance premiums etc.
Payoffs are an important part of a VA refinance because they will allow for the new lender to see if the veteran is current on his/her payments and how much the new lender will need to pay the current lender to payoff the loan.
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