What Is The Best Time Of the Month To Close?
You may not realize it if this is your first time buying a home at the Lake of the Ozarks, but the time of month that you close on your home can have a significant impact on your finances. There is no "right" or "wrong" time of the month to close, but your desired closing date should match your financial needs. Our Lake of the Ozarks real estate agents are here to help you weigh the pros and cons.
Unlike rent, mortgages are paid in arrears. If you close on May 28th, your first mortgage payment will be due July 1. (You pay for the remaining days of May at closing, and your July 1st payment covers the month of June.) If your closing date is moved up to June 3rd, however, your first mortgage payment will not be due until August 1.
Reduced Closing Costs
If you're looking to save as much money at closing as possible, closing at the end of the month will probably be your best bet. You won't be making your first mortgage payment at closing, but you will be required to pay interest for every day that you own the home. If you close on May 28th, you would only have to pay interest for four days (28th, 29th, 30th, and 31st). If you close in the beginning of the month, on the other hand, you will have to pay several more days' worth of interest.
Closing at the end of the month will drastically reduce the amount of money you owe up front, so this could be a good financial move if you're looking to keep closing costs down.
Time Until The First Mortgage Payment
If you want to buy yourself some extra time before your first mortgage payment is due, you may want to consider closing at the beginning of the month. You will owe more interest at closing, but you will get to wait longer before making your first mortgage payment.
Unlike rent, mortgages are paid in arrears. If you close on May 28th, your first mortgage payment will be due July 1. (You pay for the remaining days of May at closing, and your July 1st payment covers the month of June.) If your closing date is moved up to June 3rd, however, your first mortgage payment will not be due until August 1.
If you can afford higher closing costs, then closing earlier in the month will buy you extra time until your first mortgage payment is due.
Which One Is Right For You?
Ultimately, you're not really "saving" money by moving your closing date up or pushing it back. Determining which time of the month to close really boils down to your specific cash flow needs. f you want to keep your closing costs low, close at the end of the month. If you want to wait longer before making your first official mortgage payment, close at the beginning of the month.
Questions? Contact Our Team!
The Gattermeir Davidson Real Estate team is ready and waiting to help you with all of your real estate needs. If you have questions about moving or relocating to the Lake of the Ozarks, remember that we're only a phone call away!
Stay connected with Gattermeir Davidson Real Estate, LLC!
Gattermeir Davidson Real Estate, LLC
Stay connected with Gattermeir Davidson Real Estate, LLC!
2011 REALTOR Salesperson of the Year
Missouri Association of Realtors
752 Bagnell Dam Blvd., Suite A
Lake Ozark, MO 65049
Office | 573.365.1555
Fax | 573.365.1766
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