It's either pay now or pay later when you are closing on a property. If you close the beginning of October and pay nearly a month's worth of prepaid interest, that will push your first mortgage payment to the begining of December . If you close near the end of September and pay 1 day of prepaid interest, your first payment will be due the beginning of November. If you get the bank to reimburse you for the extra prepaid interest at the time of closing due to the delay, are you going to give them that money back when you don't have to start paying your mortgage in November? Interest on a mortgage is paid in arrears. In the first situation, that first payment in December is paying November's interest. Since there is no payment made in November, your mortgage company needs you to pay that interest for October at closing - ahead of time. That's why you are paying 'prepaid' interest on a loan where the interest is paid in arrears :) It's really just a matter of your availability of money and whether you can afford to come up with the extra money for prepaids at the time of closing or if you are short of money and need to budget that into the following month. That's why a few good faith estimates with varying closing dates is important. If your contract says that you are supposed to be closing the end of September and your budget will only allow that because you don't have the prepaid interest to push out your first payment, then you need to rethink your purchase - and I'm assuming that you did not use agent to guide you through your options there...
Also, when you sell or refinance this property, you are most likely going to have to pay that 'out of mortgage payment' interest again! If you sell your home 5 years from now on the 15th of September, you will owe your bank the interest acrrued from the 1st to the 15th of September since you have yet paid your October payment. That's why your 'balance' on your loan is often different than your 'payoff'. Your agent should have, as a standard part of their listing package, a net sheet that has an area that figures in your estimate for the difference. It's probably safe to figure in at least 1/2, if not one complete mortgage payment as a possible addition to your loan payoff when selling. If the idea of prepaid interest is killing your buying budget now, you need to know that your seller proceeds that you receive at this later date will be affected the same way.
Since you asked about your legal options, I will cover myself by saying that if you feel the need to seek out the advice of an attorney, please do.
Like others said, concentrate on the fact that you're getting a below market price. It might help to take a stroll through the house with your agent again so you can remember what all this aggravation is for. Take measurements, pictures, make plans, anything to stay focused on your end goal. Good luck to you :)
Also, if you were to close at the end of September you would pay only a few days interest charges and make your first mortgage payment on 11/1/08.... if you settle in Octomber you will have to pay interest charges through the end of the month, but your first morgage payment will not be due until 12/01/08. I know is just the thought of bringing more money to the table that matters to most buyers, but if everythign else fits in place it may not be worth your expense of paying an attorney. Of course you have that option but first compare your cost of hiring an attorney vs. paying the extra interest up front.
I am not discouraging you from contacting an attorney, I am merely giving you my thoughts based on my experience.
I wish you the best and I hope you enjoy your new home.