Loan Closing Tips for the Cash Strapped Buyer

Hello Hampton Roads,

A recent article in the New York Times  talked about the most popular times to close on a mortgage which is on Fridays towards the end of the month and then went on to explain the many reasons behind it.

 Aside from matters of personal convenience, I'd like to focus on one of the most popular reasons for closing at the end of the month which is that  it benefits the cash strapped buyer.  By closing towards the end of the month, the amount of daily interest a borrower pays is less. For example, if there are 30 days in a month and a buyer closes on the 28th,  then he or she would only pay 2 days interest to the 30th versus a closing on the 6th where an additional 24 days worth of interest payments would be due.

The article goes on to say that so long as a buyer's moving date is at or near the closing date, then the date of the first mortgage payment wouldn't begin until the month after.  For example, if  a buyer closes at the end of March, then the first mortgage payment wouldn't be due until May 1st.  This is true since mortgages are paid in arrears.  If you consider this fact, the article reasons that if a buyer needed to stretch out the time until the first mortgage payment is due, then he or she may wish to consider closing earlier in the month and rolling the daily interest into the loan and thereby stretching the mortgage payment due date out to 6 weeks or more.

You can read the full article here:  "What's the Best Day to Close on Your Mortgage"

I hope this found this helpful and if you are in the market to purchase a home, please feel free to contact me to get started. I'm happy to send you home listings, help with your pre-approval and set up appointments to show homes of interest.

Thanks for Reading,

View Liz Schuyler- CDPE, SFR, e-PRO's profile on LinkedIn _________________________

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