Finding a 203k lenders is tricky, well ones that actually know how to do one that is.
They bank wanted 3 months of reserves. We had the closing cost rolled in (at 3% and it was enough to cover everything). We ended up getting part of the money gifted to us before closing, we told the bank this and before we closed they essentially gave us a number of what had to be in the account for us to close.
With the extent of work required the bank rolled 6months of mortgage payments into the loan. Which pushed us over our DTI. We spoke with our contractor and they told us they could do the renovation in 3 months. So we got a letter from them to give to the bank and they dropped the rolled in payments to 3 months.
Mortgage interest on the loan starts accruing the date the loan is disbursed (closing date for a purchase, 3 days after for a refi) so part of your closing costs will be the mortgage interest prorated from the time of disbursement through the end of the month.
Say your interest payment is $300 and you close on April 1st. As part of your "closing costs" on APR 1, you will bring April's interest payment of $300. If you close on April 15th, you will bring only 1/2 of that to cover the remainder of the month, or $150.
The same is true for homeowners insurance, property taxes, etc.
That is why realtors always try to close towards the end of the month; to lower their buyer's needed closing costs.
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