Buying a house is a big decision, and your closing day may seem like it’s far away. While there are many steps before closing, the date you close can make a difference.
Find out more about closing dates, their significance, and how to choose the ideal time to close.
When you complete the last payments and fees and obtain complete ownership of your new house, the closing process takes place. Closing is more involved than just handing the seller a check and taking the keys. The walkthroughs, final loan approval, and inspections that precede it may take several weeks, but everything comes to an end the day you sign closing documents.
Closing day is the final step in completing your real estate purchase. You set this date when you negotiate with the seller, usually just after they formally accept your offer. Once you complete the necessary paperwork at closing, you take ownership of the property.
Ever felt like you’re drowning in a sea of paperwork, juggling deadlines, and navigating the labyrinthine world of refinancing? You’re not alone. Refinancing your mortgage can be a daunting task, but fret not, intrepid borrower for I’m here to guide you through the murky waters and help you snag the best day to close on your refinance.
Now before we dive into the nitty-gritty, let’s address the elephant in the room: there’s no one-size-fits-all answer to this question. The “best” day depends on a constellation of factors each twinkling with its own significance. But fear not, for I shall illuminate the key considerations that will guide you towards your refinancing nirvana.
The Allure of the End: Why Closing at Month’s End Might Be Your BFF
Let’s face it, most of us aren’t exactly thrilled about the prospect of shelling out extra cash. That’s why closing at the end of the month often emerges as the champion, especially if you’re eager to avoid paying unnecessary mortgage interest
The short version is that you usually have to pay interest on both your old and new loans until the closing date of the refinance. Thus, you will pay interest on both loans for half of the month if you close, say, on the 15th of the month. Not exactly a recipe for financial joy, right?.
But wait, there’s more! Closing at the end of the month also aligns your payment schedule with your new loan, making things a tad less confusing come billing time. No more juggling multiple due dates, just one neat and tidy payment each month.
The Flexibility Factor: When Closing Early Could Be Your Saving Grace
Even though closing at the end of the month usually wins out, there are some circumstances in which an early closing could be your secret weapon. Let’s explore the scenarios where this strategy shines:
- You’re in a time crunch: Life throws curveballs, and sometimes you need to close on your refinance ASAP. Perhaps you’re facing a looming rate hike or need to access cash quickly. In these cases, closing early might be your only option.
- You’re eager to lock in a lower rate: Interest rates are like chameleons, constantly changing their colors. If you spot a rate that tickles your fancy, closing early could help you lock it in before it disappears like a mirage in the desert.
- You’re dealing with a complex loan: Some refinances are more intricate than others, involving appraisals, title searches, and a whole lot of paperwork. If your loan falls into this category, closing early might give everyone involved more breathing room to get things done without feeling rushed.
The Balancing Act: Weighing the Pros and Cons of Different Closing Dates
Recall that the “best” day to close depends on a combination of your unique situation and the constantly changing mortgage market. In order to aid you in making an informed choice, let us examine the advantages and disadvantages of various closing dates:
Closing at the End of the Month:
Pros:
- Avoid paying extra mortgage interest.
- Aligns your payment schedule with your new loan.
- Gives you more time to gather paperwork and complete necessary tasks.
Cons:
- May not be feasible if you’re in a time crunch.
- Could miss out on a lower interest rate if rates rise.
Closing Early:
Pros:
- Can lock in a lower interest rate.
- May be necessary if you’re facing a deadline.
- Gives you more flexibility if your loan is complex.
Cons:
- May have to pay extra mortgage interest.
- Could feel rushed if you’re not fully prepared.
The Final Word: Your Personal Path to Refinancing Bliss
Ultimately, the best day to close on your refinance is the one that aligns perfectly with your unique needs and goals. Take your time, weigh the pros and cons, and don’t be afraid to ask your lender for guidance. Remember, they’re your partners in this journey, and their expertise can help you navigate the twists and turns of the refinancing maze.
So, go forth, intrepid borrower, and conquer the world of refinancing with confidence! With the right knowledge and a dash of strategic planning, you’ll be closing on your dream rate in no time.
Can you schedule your closing date too late?
When planning your closing date, exercise caution as waiting too long may negatively affect both your mortgage loan and your lender. If you’ve locked in an interest rate, it will expire after a certain amount of time. It’s possible that your financing arrangement has changed, and you’ll need to rework the whole loan package. You may even have to make larger monthly mortgage payments.
What happens on your closing date?
Depending on your state, you will meet with a title company representative or an attorney on the day of the official closing, usually at their office. Your real estate agent and your attorney or legal representative may join you for closing. The seller may also be there, or they may pre-sign the necessary documents.
During closing, you’ll:
- To close the deal, pay the full amount owed, including the remaining down payment and expenses. You will be given the required amount of money to close by your lender or closing representative; you might need to bring a certified check or have the money wired electronically.
- Verify that the transfer documents have been pre-signed or watch the seller sign them.
- Sign a deed of trust, a mortgage note, and a settlement statement, among other documents.
Although it seems easy, closing can take an hour or two due to the amount of paperwork that needs to be completed.
Refinance tips | Rescission period during refinance
FAQ
What is the best date to close on a refinance?
Is it better to close on the first or last day of the month?
How long does a refinance closing take?
What is the best time to refinance your home?
When should I bring my refinance document to a closing?
Legally, your lender must provide you this document three days prior to signing your loan documents. Use this time to ensure it’s accurate. And, don’t forget to bring it with you to the actual closing. Unlike your home purchase closing, there are fewer people involved in a refinance closing.
Should You Close Your refinance on the last day of the week?
The day of the week you opt to close may make a difference, too. “Your refinance closing date can save you money if you choose to do it preferably on the last business day of the month, unless it falls on a Monday,” explains Cliff Auerswald, president of All Reverse Mortgage in Orange, California.
When is a good time to refinance a mortgage?
If there’s a delay by one day, you will also pay interest on both loans over a weekend. Signing the docs on Tuesday or Wednesday is the best for closing a mortgage refinance because the new loan is funded on Monday and you have the entire week to work with. Thursday is also a good day but not as good as Tuesday or Wednesday.
How long does it take to close on a refinance?
It usually takes about half an hour to sign all the necessary documentation when closing on a refinance. Refinancing a mortgage is typically less complex than buying a home, so closing takes less time. However, depending on the questions you might have, closing could take longer. How long does funding take after closing on your refinance?