Home Buying in Clifton>Question Details

Atk, Home Buyer in Clifton, VA

Is it a good idea to have closing on 1st of the month?

Asked by Atk, Clifton, VA Sun May 24, 2009

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You can close & fund your new purchase loan at the beginning of the month & have the option to pay or NOT to pay the remaining months interest. I believe you have up to five days into the new month where you have the luxury of this option. Ask your lender.

All the best,
Ros

Roswell Moore, CMPS
Certified Mortgage Planner
(480) 422-5095 Direct
http://www.ezAZloan.com
Web Reference: http://www.ezAZloan.com
0 votes Thank Flag Link Sun May 24, 2009
The answer is ... it depends. When you close, the settlement company will collect interest for the remainder of the month so, if you settle on the first of the month, they will collect interest for the entire month. However, since interest on mortgage payments is paid for the previous month, your first payment won't be due for 2 months. For example, if you settle on June 1, you will pay interest at closing from June 1 to June 30. But your first payment won't be due until August 1 because you'll be paying the interest for July. Of course, if you're paying cash, it doesn't make any difference at all.
Web Reference: http://www.GlendaCherry.com
0 votes Thank Flag Link Sun May 24, 2009
Doesn't matter too much - at the first of the month, the buyers costs are higher (because you are prepaying interest for the duration of that month), at the end of the month it is less. The reverse is true for sellers. Other than that, it is driven by personal agendas.
0 votes Thank Flag Link Sun May 24, 2009
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