What is the best day of the month to close on a refinance?

A. The best day to close a home purchase, or a mortgage refinance, is on the last business day of the month, unless it falls on a Monday. Then you should close on the preceding Friday so you don’t have to pay interest over a weekend.

What are odd days interest?

“Odd days’ interest” refers to the practice of collecting at closing the “per diem” interest that will accrue between the closing date and the day of the month when regular monthly payments are due.

Who pays interest on the day of closing?

Borrowers often are charged interest by both lenders for 1 day, and sometimes 2 or 3. The major reason seems to be that the funds don’t move directly from the new lender to the old lender.

Do you pay interest on closing date?

When the time comes to close on a mortgage, borrowers are expected to pay accrued interest from the time they close through the last day of the month. “Therefore, the closer to the end of the month that you close, the less interest you will have to pay,” McCrea said.

How long after you close on a house is your first payment?

Your first mortgage payment will be due on the first of the month, one full month (30 days) after your closing date. Mortgage payments are paid in what are known as arrears, meaning that you will be making payments for the month prior rather than the current month.

Is it better to close on a home in December or January?

If cash is in short supply, closing as late in the month as you can can make economic sense. However, the later you close, the sooner your first full mortgage payment will be due. Here’s another example of how it works: Say you close on Jan. 28.

What is an odd period?

An irregular length first period happens when the debtor borrows money on one date and the payments are due on a different date. If a real estate transaction closes on July 15th and the first payment is not due until September 1, an odd length first period is created — specifically a “long first period”.

What is a odd loan?

Odd-days interest is the term used to describe interest due on a mortgage to cover an initial, partial month payment before regularly scheduled payments begin.

Is it better to close at beginning or end of month?

Consider closing in the middle of the month. You’ll pay less prepaid interest than closing at the beginning and your lender shouldn’t be as busy. If you’re able to take advantage of a first-time homebuyer program to cover some or all of your closing costs, then closing early in the month can save you money.