When individuals close on their mortgage loans, they are responsible for closing costs, too. Mortgage companies generally collect these fees and they typically cost two to five percent of the purchase price of the home. Luckily, there’s an inside scoop to saving on closing costs: close at the end of the month.
Although understanding why you should close at the end of the month seems confusing, it’s fairly simple. When one closes their mortgage, they must pay any interest that accrued from their closing date until the last day of the month. For example, if an individual closes their loan on June 5, they must pay all of the interest that accrued from June 5 to the end of the month. However, if they close on the June 29, they’ll be responsible for paying interest from June 29 and June 30.
Overall, closing earlier in the month has its advantages as well. If one closes earlier in the month, they’ll avoid mortgage companies busiest days, which could in turn result in a less stressful closing. Regardless of when you decide to close your mortgage, Castle and Cooke is here to help. Our team is dedicated ensuring you successfully navigate every step of the home buying process.
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