If you are in the process of closing on your mortgage loan, delaying your closing until the end of the month will save you money. Here is how you will save by closing on the last day of the month. When you close on your mortgage one of the expenses you will be required to pay is the interest due from that date until the end of the month; by closing at the end of the month you will pay less. Here is an example: If you close on your mortgage in July, your first payment will be due in September. This payment will include interest and principle due for August. The catch is that interest starts building up the day you close. If you close on July 30th, you will pay interest for the 30th and 31st. Suppose Your Mortgage Amount Is: $150,000 Your Interest Rate: 6% Daily Interest You Pay: ($150,000 x 6%) = $27.09 If You Close on July 15th: you will pay 16 days interest (16 x $27.09) = $433.44 If You Close on July 30th: you will pay 2 days interest (2 x $27.09) = $54.18 This should be a no-brainer: Insist on closing on the last day of the month and you will save money. You can learn more ways to save, including common mortgage mistakes to avoid, by registering for a free mortgage guidebook. |
