Timing Real Estate Closings
We love to get easy to answer questions! During real estate closings, a home buyer pre-pays the mortgage interest for the rest of the month. The closer to the end of the month the closing is held, the less cash the buyer has to come up with out of pocket.
Pushing an act of sale date to the beginning of the month means the buyer must pre-pay all/the majority of that month’s interest. For some first time buyers, this can cause them to be a little short of cash to close, causing further delays. Hint: sellers don’t like closing delays, title companies don’t like delays, and you certainly don’t want to have to reschedule your movers.
For first time buyers, moving out of their rental at the end of the month makes the most sense. Why pay extra rent when you don’t have to?
Do closings have to be at the end of the month?
Now, sometimes the lender time to process and fund a new mortgage makes an end of the month closing impossible. It’s not the end of the world, we promise. When we write a closing date into a contract, we’re doing our very best to ensure that the lender will have plenty of time to get your mortgage application processed and underwritten and ready to close by the date agreed to between you and the seller.
Buying a New Orleans home? Ask your agent about the best closing date to write in your offer.