There are several options you need to consider when choosing the closing date on your mortgage. However, there are 3 primary choices that will help determine how much your closing costs will be on your closing date and the impact on the timing of your first mortgage payment. This enables the seller to close the sale of their home and transfer the title to the person or persons buying the home.
Things to Consider When Closing
In addition to the above, there are a several documents in the closing process to be aware of including:
- The disclosure statement – details the costs involved
- The promissory note – explains how the loan will be paid
- The title – details ownership of the home
- The deed – same as “title”
Finally, we have the closing costs. Closing costs typically include appraisal fees, credit reporting charges, taxes, title insurance, and other costs or fees that can arise when buying a home.
Choosing the Closing Date
While there are numerous factors to consider during the closing stage of the home buying process, the choice of closing date can either make the deal or break it for the seller. The closing date should be chosen carefully so both the buyer and seller benefit. Here are the 3 primary options for the choice of closing date:
- Close at the beginning of the month – pre-paid interest begins accruing during the month between the closing date and month’s end. This means you’ll need more money at closing time to compensate for the prorated interest. On a positive note, closing at the beginning of the month provides more time to prepare for your first monthly payment.
- Close at the end of the month – closing at month’s end means less accrual of interest after the closing date. In other words, there won’t be as much prepaid interest due at closing. Unfortunately, this provides less time between closing and the costs involved and your first monthly mortgage payment.
- Close at the middle of the month – if you’re not sure about how much you want to pay at closing or when you want to make that first monthly payment, closing on the 15th or 16th of the month is the best choice. The upside is that you’ll have roughly 45 days to get ready for that first payment and you’ll only owe a half months’ worth of interest at closing time.
We are here to help you understand all the details in choosing the right mortgage and the right time to close. To learn more about the closing process or getting a home loan, call Liberty Capital Services today at (614) 505-0620!