Schedule the Mortgage Closing at the End of the Month to Save a Ton in Interest

You might experience sticker shock when you go to close the mortgage on your first home. One item you can save a whole lot of money on: Prepaid interest costs.

WiseBread points out that closing near the end of the month could save you hundreds of dollars.

Here’s an example: If you close on November 5 and your first mortgage payment is due after January 1, your first payment will, of course, include the interest that accrued in December. But it will also include the interest accrued in November. If you close November 5, that’s 26 days of interest.

But if you close on November 27, you will only pay three days of interest for that month. If your interest comes out to $25 a day, closing on November 5 will cost you $650 in November interest on your first payment. If you close on November 27, it will cost you just $75.

So ask the bank to schedule the closing towards the end of the month and save the money for other closing costs or stuff for your new home.

4 Mortgage Secrets Only Your Broker Knows | WiseBread

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