If I am refinancing a mortgage with another bank, can the previous bank charge a percentage of any extra cash that we get from a new mortgage?
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If I am refinancing a mortgage with another bank, can the previous bank charge a percentage of any extra cash that we get from a new mortgage?
Asked on October 6, 2012 under Real Estate Law, New York
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
Whether or not the prior lender can charge "points" with respect to the new loan that is being obtained to refinance the existing loan seems doubtful. Usually "points" which is a percentage of the loan is charged by the lender of the new loan to the borrower.
The prior lender should get no part of such proceeds. I suggest you consult with a real estate attorney further about this matter if you have further questions.
B.H.F., Member, Texas State Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
A mortgage lender can only charge interest or fees on the amount of funds that they financed. If the new mortgage company is giving you some cash as part of the refinance, you will only owe fees to the new mortgage company per your agreement with them.
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