Closing before the end of the year? Advantages or disadvantages?

[teton]

My mortgage person just told me there is a possiblity we could close before the end of the year. Are there any advantages/disadvantages to doing this? It is a FHA mortgage, if that makes a difference. Thanks.

[Anonymous]

i would wait to skip a longer payment.  

How long did your process take from when you submitted the purchase agreement 

[teton]

My offer was accepted on November 17th, I don't know if mine would take longer because it is a foreclosure and I have been dealing with the bank and the receiver.

[IOBA]

If you can close before the end of this year, you would have points and closing costs (?) you could deduct from your taxes for 2011.  There could be a tax advantage to closing this week.

[frogfan12]

Can you deduct closing costs on your taxes?

[IOBA]

I don't know...that's why I put the question mark behind closing costs.  The points can be deducted (as far as I know).

[Tooliebell]

I have considered putting off my closing until January, just so I don't have to make a payment until March.  But at this point, I would take a 3am closing hour anytime right now!

Plus, if you close the beginning of the month, I think you have a lot of days of prepaid interest that would be included in your closing costs. 

If I were you, I would take a closing date as soon as it is offered!!!

[StartingOver10]

It depends upon many factors.

In some locations, like Florida for example, you have to own the property by Dec 31, 2011 and claim the home as a primary residence in order to claim the $50k homestead exemption for 2012. Claiming the Homestead Exemption is a large savings on your taxes per year PLUS it establishes the assessment cap. Here the real estate taxes can only increase by 3% of assessed value or cost of living - whichever is lower. So the longer you are in a property the lower your assessment (in general). So if you close in Jan 2012 and your property is in Fl you would not be able to take advantage of the homestead exemption for 2012, but would be able to file for 2013.

Check your state and county to see if you have similar advantages to closing by the end of the year. Your state may or may not have homestead and it may or may not have such a deadline. These types of things vary tremendously from state to state. Your Realtor would probably know your local advantages to closing or waiting too.

Congratulations on your new home!