topic difference btw closing last day of the month or first in Mortgage Loans

difference btw closing last day of the month or first

wendlan — Thu, 25 Jun 2015 19:28:43 GMT

How does it work out as far as closing costs if I close on the first day of the month as compared to the last day of the month? I know if I close June 30th I have to make the first mortgage payment Aug 1st and if I close July1st my first mortgage payment is due Sept 1st. But how does the prorating go? If I close July1st does that mean I pay a full mortgage payment within the closing costs?

Re: difference btw closing last day of the month or first

mynameainttracy — Thu, 25 Jun 2015 19:31:54 GMT

You would pay a month's worth of interest. We closed on the 17th. We had to pay interest from 4/17 to 5/1.

Re: difference btw closing last day of the month or first

wendlan — Thu, 25 Jun 2015 19:35:00 GMT

Wondering if it is a better deal to close on June 30th or July 1st? I don't know how much a months worth of interest is,maybe on my loan papers somewhere.

Re: difference btw closing last day of the month or first

CH-7-Mission-Accomplished — Thu, 25 Jun 2015 22:38:07 GMT

It will be about the amount of one loan payment -- a little less since there is a tiny bit of principal repayment.

Loan amount X Interest rate/365 days X 30 days = Interest for one month.

(Mortgage lenders actually us a 360 day year, but the above will be close).

Re: difference btw closing last day of the month or first

Anonymous — Thu, 25 Jun 2015 23:06:26 GMT

Example:

Closing June 30th = pay 1 day of prepaid interest at closing, first payment due before August 15th.

Closing July 1st = pay 31 days of prepaid interest at closing, first payment due before September 15th.

Re: difference btw closing last day of the month or first

Anonymous — Fri, 26 Jun 2015 01:31:45 GMT

I have also heard that the lender can give a credit for the 1 day of interest. Then the 1st payment would still be due August 1st.

Re: difference btw closing last day of the month or first

wendlan — Fri, 26 Jun 2015 21:34:11 GMT

Chaylea, I sure wish my bank would do that for us!! Closing is June 30th at 5pm..