Refi hit with extra interest charges

Funding for new loan has unfortunate timing

DEAR BENNY: Recently we refinanced our California home with one of the major U.S. banks. After five months we finally received a notice that the loan documents were ready to sign at a local title company. I requested a preliminary copy of the HUD-1 statement in order to look at the numbers before we signed. On the statement I noticed that the short-period interest on the new loan paid through escrow covered the same five-day period as the payoff interest on the old loan. Both lenders charged us interest for the period July 27 though Aug. 1.

When I asked the loan officer about this, she told me that this was due to timing differences between the funding of the new loan proceeds and the payoff of the old loan. I can understand one day, but doesn’t five days seem excessive in light of electronic banking? –Walter