Best time of month to close on mortgage?

Question

Is there a best time of the month to close on a mortgage and why? Is the beginning, middle or end of month the best or does it just not matter? Thanks!

Brad in Wake Forest, NC

Lien Vuong · Answer

I dont have a particular preference but if you want to split hairs beginning to middle (5-15th) is better since debt isnt due for 45 days from closing and you also get prorated rents from tenants for the remainder of the month.

David M. · Answer

@Brad Swearingen

sounds like you and/or your friend need to acquaint yourselves with the breakout of the "closing costs" more closely. There are different types of "costs." Really briefly, there are "costs" that are what I call "true" or "fixed" expenses such as recording fees, attorney fees, points if any, etc. Then there are the prepay/escrows. Its these prepays that I don't really consider actual "costs/fees" to "buying the property" because you are paying for them anyway.

For example, you "prepay" the first FULL month's mortgage and the prorated amount of the the month that you are in. So... if you close on the 1st, part of the closing costs (or cash to close) will really include 2 months of mortgage payments (PITI usually). But, if you close on the 30th, you only have 1 month of PITI prepaid.

Nowadays, the closing disclosures and legally required Good Faith Estimates (or whatever they are called now) actually shows the two sets of amounts.

I might be missing something, but you really don't get charged "more" for closing early, or 'unfairly charged more' --- obviously its "more" since you have up to an additional month of increased carrying costs to pay for...

Hope that helps. Good luck.

Brad Swearingen · Answer

I am asking because I heard it was better to close near the beginning of the month so you can apply the rent to the closing costs if you want to, plus I don't have to pay my first payment until the next month. A friend of mine said it is better to close at the end of the month because otherwise the lender charges you more.

David M. · Answer

@Brad Swearingen

As you can see, you need to define "best." You could close at the end of the month so try to keep your closing costs down a bit... the prior comment about closing earlier to middle about hte 45 day until debt is due is true, but that's because you've already pre-paid it...

This is real estate investing. There are plenty of methods to do a single thing. What are you looking to achieve?

Justin Phillips · Answer

Early to Middle will be your best bet. End of Month can get crazy with certain rate-locks expiring, and other EOM type business tasks.

Patrick Knapp · Answer

@Brad Swearingen

I would say it depends if you have any renters you’re going to be acquiring if not not really

Best time of month to close on mortgage?

Best time of month to close on mortgage?

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