Real Estate Protip: Closing Date

cari-mcgee-sold-signFrom what I understand, a lot of real estate closings happen at the end of the month. I don’t know why that is … maybe a local real estate agent could explain if that’s true and why.

Here’s a protip from a non-real estate agent: Set your closing date for early in the month.

Why? It’ll be a nice money-saver when it comes to making mortgage payments.

For starters, mortgage payments are due on the 1st of each month, but every lender I’ve ever had to pay allows you a 15-day grace period. So, it makes sense to make your mortgage payment on the 15th of the month. (Let that money collect interest in your bank account for 15 extra days before you send it to their bank account.)

Second, when you buy a new house the first mortgage payment skips a month. You don’t start paying until the start of the second month after the purchase.

Example: When we bought our new house, our closing date was March 5th. We had not yet made the March payment on the old house. On March 5th, that loan was paid off and our loan for the new house began. But the first payment on that loan isn’t due until May 1st!

So, by closing in early March, we managed to avoid making a mortgage payment in both March and April. That’s pretty cool.

I don’t think that would’ve been the case if we’d closed in late February. But perhaps my wife will correct me on that. (?)

(Come to think of it … maybe I should’ve saved this for a guest article on her blog? Oh, well.)

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One Response to Real Estate Protip: Closing Date

  1. eric naulaerts April 3, 2012 at 10:07 am #

    I did the same for our new home (well, 12 years ago). Usually we get our salary the last, our the 1st of the month, and that made us choose for the 10th of each month to pay our mortgage payment.

    In the past we were obliged to pay mortgage payment the last of the month, and that was a horrible moment, especially when the last one was on a friday, and salry only came on monday or tuesday …

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