Both parties pay interest on their respective loans until they are paid in full. All loans have a per diem interest and that is charged daily. When you request a payoff you pay interest until the day the loan is paid off. On a new loan you start paying interest the day your loan funds.
REALTOR | Mortgage Broker
Keller Williams Realty | 360 Lending Group
The month of closing, your interest costs are broken down to a daily rate. If you close on the 15th of the month, you would pay 15 days of interest and the buyer would pay 15. I hope this helps.
Yes, you will pay a pro-rated amount of principal, interest, taxes and insurance for the month in which you close (plus water, sewer, HOA if you have one, etc. ) For example, if you're closing on the 15th of the month...you pay for 15 days or 14 in some states). Your title company should be able to give you an estimate of your closing costs.
Typically yes you would pay interest and principal payment the month of closing.
This could of course depend on the terms of your loan.
You can typically call your lender...tell them what day you will close and they can give
you payoff amount.
Remember how you got that "free" month when you got the loan. Well it's not really free.
Typically loans are set up where you have the money and pay the interest for use of the money.
So if you typically pay 1st of month, that is last month's interest.
If you close on 25th of the month, then you owe the outstanding loan balance AND 25 days of interest
for which you had use of the money.
Hope that helps.
As a seller, if you currently have an FHA loan, you will pay a full month's interest no matter what day of the month you close. If you have a conventional loan, then the interest will be prorated according to the day of the month in which you close. That's why if you are selling a home and have a closing date of say the last day of the month and the closing is delayed to the next month AND you have an FHA loan, you will usually incur quit a bit more closing costs because you will pay another full month's worth of interest.
I hope this helps answer your question.
The seller pays the pro-rated principal, interest, taxes and insurance till the day of Closing. Please contact me via email at TXRealtor786@gmail.com or call 832-316-0404 with any further questions or concerns you may have. I work in the Katy area and will be happy to assist in providing a sample HUD-1 closing statement.
Codybug, when you start working with a Realtor, and find your dream home, you would be given an estimate of your closing costs. Also, your mortgage company or bank will give you a good faith estimate of your costs. I live in Katy and would be glad to assist you.