So, you’ve finally found your dream home and are ready to close the deal. But before you pop the champagne, you need to figure out the best day to close on your mortgage.
This seemingly simple question can have a surprisingly big impact on your finances. Choosing the right closing date can save you money on interest payments and give you more time to prepare for your new monthly mortgage payment.
But how do you know when the best time to close is? Don’t worry, we’ve got you covered. In this guide, we’ll explore the best times to close on a mortgage, taking into account factors like:
- Interest payments: When you close on a mortgage, you’re responsible for paying interest from the closing date until the end of the month. So, closing early in the month can save you money on interest.
- First mortgage payment: Your first mortgage payment is typically due on the first day of the month following a 30-day period after closing. So, if you close on August 30th, your first payment would be due on October 1st.
- Cash flow: Closing at the end of the month can give you a little extra time to save up for your first mortgage payment.
- Taxes: Depending on your tax situation, you may be able to claim certain deductions related to your home purchase if you close in a particular month.
The Best Time of the Week to Close on a Mortgage
While any day is a good day to close on a desired property, real estate agents and attorneys typically prefer closes between Tuesday and Thursday. This is because closing real estate transactions requires both the buyer and seller—and their representative attorneys—to sign off on hundreds of pages of documents If a document is missing or incorrect and needs to be drafted or modified, a midweek close is preferable since it offers the highest chance that all implicated parties will be available to keep the transaction moving forward
The Best Time of the Month to Close on a Mortgage
The best time of the month to close on a mortgage depends on your individual financial situation, Here are some things to consider:
- Interest payments: If you want to save money on interest, you should close early in the month. However, this will also mean that you have to make your first mortgage payment sooner.
- First mortgage payment: If you want to have more time to save up for your first mortgage payment, you should close later in the month. However, this will also mean that you will have to pay more interest.
- Cash flow: If you are tight on cash, you may want to close later in the month so that you have more time to save up for your first mortgage payment.
- Taxes: If you are planning to claim certain tax deductions related to your home purchase, you may want to close in a particular month.
The Best Time of the Year to Close on a Mortgage
The best time of the year to close on a mortgage also depends on your individual financial situation. Here are some things to consider:
- Taxes: If you are planning to claim certain tax deductions related to your home purchase, you may want to close in a particular year. For example, if you are planning to claim the mortgage interest deduction, you may want to close before the end of the year so that you can start claiming the deduction right away.
- Interest rates: Interest rates can fluctuate throughout the year. If you are concerned about interest rates, you may want to close when rates are low.
- Personal finances: If you are expecting a large influx of cash in a particular month or year, you may want to close then so that you can use the money to pay down your mortgage.
The Bottom Line
There is no one-size-fits-all answer to the question of when the best time to close on a mortgage is. The best time for you will depend on your individual financial situation and your personal preferences.
Here are some additional tips for choosing the best closing date for your mortgage:
- Talk to your lender: Your lender can help you understand the different factors that can affect your closing date and can help you choose the best date for your situation.
- Consider your personal finances: Think about your cash flow, your tax situation, and your personal preferences when choosing a closing date.
- Be flexible: If you are flexible with your closing date, you may be able to get a better deal on your mortgage.
No matter when you choose to close on your mortgage, make sure you are prepared for the closing costs and the first mortgage payment. Closing on a mortgage is a big step, but it can also be a very exciting one. By following the tips in this guide, you can choose the best closing date for your situation and make the process as smooth as possible.
Closing at the end of the month
There’s a reason most buyers close at the end of the month. Some advantages of this strategy include:
- Reduced closing costs: By delaying your closing until later in the month, you will cut down on the amount of money you have to pay at closing since interest and taxes will be paid upfront and the period of time for which interest and taxes can accumulate will be shorter.
- Get the most out of your rent: If your lease expires at the end of the month, you can stay in and enjoy your home until the very last day rather than having to vacate with a few weeks remaining in your term.
For example, let’s say you have an apartment lease that ends in April. You decide to close in April and set April 28 as your closing date. Only the final three days of April—April 28, 29, and 30—will be subject to mortgage interest due to April’s thirty-day count. Additionally, since your lease expires on April 30th, you won’t have to extend it or vacate before it expires.
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In order to lower their upfront closing costs and save money on interest, many buyers of new homes choose to close later in the month. This tactic can save you money on interest during your closing, but it may negate some other benefits.
We can help you choose the best closing date for your situation. We’ll go over the importance of your closing date as well as the advantages and disadvantages of closing at the start or end of a month.
Your choice of closing date for your house purchase is important because it affects some of the closing costs that you will incur. Closing at the end of the month is the best option for most home buyers because you’ll pay less interest up front.
Your financial situation at the time of closing and personal preferences will determine the ideal time to close on a property.
Although every home loan and purchase is unique, you can typically anticipate closing on a property in 30 to 60 days.
Whats the best day of the month to close on a house?
FAQ
What day of the week is best for closing?
Is it better to close on the first or last day of the month?
What happens if I close on a Friday?
When should be the closing date?
Should you close on a mortgage early in a month?
That means you basically get a month to live in the home mortgage-free. Note, too, that closing near the end of the month means your first mortgage payment comes sooner than if you had close early in the month. On the other hand, let’s say you close on a mortgage early in the month, say on the fifth day instead of the 30th.
How long does it take to close on a mortgage?
However, based on data from the 12-month period ending December 2020, the average time to close a loan for a home purchase was **47 days** . 2. **Closing Itself**: The closing process
When is a good time to close a house?
If you need to be occupying your home by a certain date to save on rent, it’s a much better deal to close at the end of the previous month (for example, January 30) instead of the beginning of the current month (February 1). What About Refinances? In general, refinances are much more straightforward when it comes to timing.
Why do you need a closing date for a mortgage?
The right closing date can help reduce your closing costs, and ensure that the remainder of the home-buying process looks like a well-choreographed ballet of financial, legal and real estate professionals. Find your best mortgage rate. Start here Related: How long does it take to close a mortgage?