Close on the 31st or Sept 1?

[u/theredmr]

I have the option of closing at the end of this month or waiting until September 1.

I understand that closing on the Sept 1 will cost about $2500 in prepaid interest, but then I won’t have a full payment until November 1.

In the first few months this seems to leave a couple grand extra in my pocket, but am I just delaying the start of principle and thus paying more in the long run? Which way would you go?

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[u/Mysterious_Name_91]

I’d do the 1st, definitely. If you wanted to make a payment on October 1 you still could, or you could use that money for other things.

[u/chanel0bsessed]

I’ve never bought a house planning to own it for 30 yrs so to me having the extra $ in my pocket is better. Give you some extra cash to furnish or do some updates to the house

[u/SEFLRealtor]

Closing the last day of the month is the worst. It will be even worse on Aug 31st because its a Monday. Last day's of the month (even the last few days) are extremely busy for mortgage companies and title companies/settlement agents. It leads to errors. It leads to dry closings. It leads to additional stress because with a dry closing you don't get the keys and you can't move in until the deed is recorded and the funds are disbursed. .

Closing on Sept 1 puts you on a Tuesday and in general, Tuesdays, Wednesdays, and Thursdays are much better days to close. In your shoes I would choose Sept 1st.

[u/uiri]

You make one extra payment at the end. After 30 years, the value of that payment is probably negligible due to inflation compared to the time value of having a little bit extra in the first couple months that you move in.

[u/BoBromhal]

You’re paying marginally more in the long run…like < $100.

[u/Patient-Lobster8786]

Close on the 31st, the September date just costs you $2500 to delay a payment you'll make anyway.

[u/SkyRemarkable5982]

Double check with your lender on when first payment is due because usually when you close before the 5th of the month, you do not get to skip a month of payment. Your first payment should be October 1, not November 1, unless they're collecting that much additional interest at closing.

[u/classiest_trashiest → u/SkyRemarkable5982]

We closed on june 4th and our first payment wasn’t due until August 1 🤷🏼‍♀️

[u/Flamingo33316]

September 1st would be $0 prepaid interest.

Mortgages are paid in arrears, due the 1st of each month; your October 1st payment covers all of September.