Originally Posted by velochic
I wouldn't skip that Feb. payment, either. If the loan isn't ready yet, then I'd save that money and put that full amount toward the principle in March.
That's not how it works, though.
When you refinance, the interest is prepaid for the month you're in IN escrow. So the interest for the remainder of January would be paid in escrow. That's your February payment.
Because interest is paid in arrears, when you make a February payment, you're paying the interest from January. Because you are refinancing in January, you'll only have a few days worth of interest due, so payment is made in escrow. The March payment is paying the February interest.
So when you refi you start making your payments after the first full month. So if you close escrow on the 10th of the month and your payments are due on the 1st, then your next payment won't be due for 6 weeks. But if you close escrow on the 31st, and your payment is due on the 1st, then your first payment is due in 4 weeks.
What I'm saying is that it's not that you're skipping the February payment, it's that it's being rolled into the loan. You're only skipping it in the sense that you don't have to come up with it out of pocket (unless you're short to close escrow).
So whether or not you make an additional payment to your interest on your HELOC, would depend entirely on when you're scheduled to close escrow. Keep in mind that mail may take up to 7 days, and processing of a payment may take up to 10 more. Obviously if you can make an electronic payment on it, that would get processed faster. Escrow can only order an updated payoff demand after that payment has cleared. No escrow company is just going to take your word for it that you mailed in a check for $500 and risk being short on a payoff. So if they can't get an updated payoff demand because the payment hasn't been processed yet, they will submit payoff of the full amount, and you will have double paid that money. At which point you have to wait for the lender to refund you the difference, which can take a full month or more. That's why we usually told borrower's not to pay extra on their last payment... it's more of a headache for everyone involved.
Hopefully that all made sense.