In this article, we’ll give you a clear idea of worst day of the week to close on a house, and help you identify key questions to answer to make sure you choose the perfect closing date for your unique situation.
When you are so close to becoming a homeowner, you don’t want to do something stupid to ruin everything. So make sure you have a strong team on your side, starting with an experienced real estate agent, if you don’t already have one. You definitely need an expert who knows your local market, because, frankly, no one likes unpleasant surprises.
Does the day you close on a house matter?
If someone other than your lawyer tells you that the closing date doesn’t matter, they’re not doing you any favors! If you want to reduce your potential stress and have a smoother closing process, think about the date on which your home purchase closes.
The right closing date can help reduce your closing costs and make the rest of the home buying process look like a well-placed ballet of finance, law and real estate professionals.
Does closing date affect bargain?
Although it is very difficult to guess how the value of real estate will change over time, there is some evidence that certain seasons are much better than others to get a bargain when buying a home or receiving a premium when selling it.
In fact, experts have already identified the best and worst days to buy or sell, so you can make the perfect choice as to when to relocate your property.
When are you expected to pay the mortgage after closing?
Mortgage interest is charged on debt. Therefore, if the loan begins on the first day of the month following the closing date, borrowers are required to pay at closing all interest due from the settlement date to the end of the month in which they closed.
The fewer days left in the month, the less the advance interest paid in the calculation. If there is not enough cash, closing as late as a month can make economic sense. However, the later you close, the sooner your first full mortgage payment will be made.
Why do lenders offer credit settlement?
Because cash is a barrier for many buyers, most lenders will provide credit during the settlement if the closure occurs early enough in the month. How much earlier depends on the loan.
If your mortgage is insured by the Federal Office of Housing and Communal Services or guaranteed by the Office of Veterans Affairs, you can usually get a loan if you close it by the seventh day. If you have a regular mortgage, a loan is usually available if you pay by the 10th.
READ ALSO: Bull Trap: Definition and how to avoid getting into one
Do lenders offer interest credits automatically?
Lenders do not offer interest rate loans automatically, so you have to ask. And if the lender agrees, you will pay a little less than you would pay at closing. But your first full payment will be paid next month, not next.
In other words, if you close on January 6, you will receive a loan of six days. If the interest is $25 a day, it means that you will need $150 less than usual when closing. But your first loan payment will be paid on February 1 instead of March 1. And this can be a problem if you have a limited budget.
How long does it take to close on a house?
What is happens at the close is the culmination of more than a month of collecting and preparing documents. For the closure to go smoothly, your foreclosure specialist, your lender or loan officer, and your real estate agent need to work together to put everything in order and handle it properly.
These people are professionals and they absolutely need to know what they are doing. But they are also people who work on many files, not just yours.
How does the day you close affect property taxes or hazard insurance?
The day you decide to spend will affect not only the amount of interest you pay, but also the amount of arrears of property taxes or risk insurance. No matter what time of the month you close, you will have to pay taxes for 14 months and insurance for two months.
If you are refinancing a regular mortgage, the closing date also does not matter. You will still pay the same amount of interest, regardless of whether you close on the eighth or 28th. Just calculations are different. Interest on the old loan stops on one day and starts with the new loan the next day.
So, if you close the loan on January 8, you will pay eight days of interest on the old loan and 23 days on the new one. If you pay on the 28th, you pay 28 days of interest on the old loan and three days on the new loan.
What is the worst day of the week to close on a house?
Friday. Take any major road / highway on Fridays from 3pm onwards. Guess what you will find? Cars and many more. Guess who might be in this car? Lawyer representing the interests of your salesperson. Maybe it’s someone from the bank.
Many offices and establishments try to close early on Fridays so that people can start their weekends, including the summer season. Let’s not plan your deal for Friday, when people have to be up late in the afternoon.
What is the best time of the year to close on a house?
For buyers who enjoy low prices in the winter months, closing on December 4 or January 26 may be especially convenient. This is because rental leases often end at the beginning or end of the month, so buyers who close on these days can move into their new property approximately after the lease expires.
Closing at the beginning of the month also means that you do not have to repay the mortgage for a few weeks, while waiting until the end of the month means that you will not charge large proportional interest as part of the closing costs.
READ ALSO: HOME CLEANING SERVICES: Best House Cleaning Services In 2022
Best way to close on a house with a good bargain
Plan your move
If you’re like most of us, you have closets and drawers full of things you haven’t used in years, and the thought of packing them in is staggering. So why not use the weeks before moving to clear some things while you plan to move the company?
Then, a week before the closing date, evaluate a few squares, agree on a relocation date with the carriers, and conduct a thorough review of what will soon be your former apartment. Need an instruction? We have compiled a useful checklist.
Skip the checkbook
When you first receive the loan documents, you will notice an estimate of the closing costs. A few days before closing, you will receive a notification of the final cost of closing with a detailed list of all commissions and fees – for example, evaluation costs, legal costs, etc.
This is the actual amount you need to enter in the form of a certified or cashier’s check – not a personal check. You will have to contact the bank to arrange this, and since the banks have a tight schedule, make sure you leave yourself enough time before the closing date to ensure payment.
Make sure you are insured
Depending on your loan, proof of homeowner insurance may be required at closing. So, if you procrastinate, stop. You need to make sure that your homeowners’ insurance is provided as soon as possible. It may be too late to wait until the last week. Depending on your loan, proof of homeowner insurance may be required at closing.
Follow the last step
The last step-by-step guide is your last chance to make sure the house is in the same condition (or even better if you asked for repairs) before signing the final documents. Setting an exact date can be difficult for the seller because you want the house to be empty, but the seller may not leave more than a day or two before closing.
That’s why some of the last instructions come in the morning after closing. Whatever you do, don’t miss it. If you notice something is wrong after you have been handed the keys, you need to resolve the issue at this stage.
Worst day to close on a house FAQs
How soon after closing do you pay the mortgage?
Let’s say you close on January 28th. You will have to pay three interest days – 29, 30 and 31 – which are usually paid with your February payment. This is called prepaid interest. However, if you decide to close on January 15, you will be required to pay 16 days in advance – from the 16th to the 31st. And if you charge interest on, say, $25 a day for simplicity, the difference between three days of interest and 26 is $400.
What is the best time to close on a house and why?
You can avoid paying all the proportional interest out of your own pocket when closing if you close as soon as possible by the end of the month. If you close at the beginning of the month, you will have a long break before this payment is due, but at the time of closing you will have to make a fairly significant interest payment for that month.
