Schedule Your Mortgage to Close at the End of the Month to Save a Ton of Interest
You may experience a sticker shock when you go to close your first home mortgage. One item on which you can save a lot of money: prepayment of interest.
WiseBread notes that closing at the end of the month could save you hundreds of dollars.
Here’s an example: if you close your bank on November 5 and your first mortgage payment is due after January 1, your first payment will of course include interest accrued in December. But it will also include interest accrued in November. If you close on November 5th, it will be 26 days of interest.
But if you close on November 27, you will only pay interest on three days for that month. If your interest hits $ 25 a day, the Nov 5 close will cost you $ 650 in November interest on the first installment. If you close on November 27, it will only cost you $ 75.
So ask the bank to schedule a closure towards the end of the month and save money on other closure costs or things for your new home.
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