{"id":15543,"date":"2011-05-09T08:00:54","date_gmt":"2011-05-09T15:00:54","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=15543"},"modified":"2011-05-07T09:40:52","modified_gmt":"2011-05-07T16:40:52","slug":"financial-closing-strategy-is-there-a-better-time-of-month-to-close-on-a-refinance","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2011\/05\/09\/financial-closing-strategy-is-there-a-better-time-of-month-to-close-on-a-refinance\/","title":{"rendered":"Financial Closing Strategy: Is there a better time of month to close on a refinance?"},"content":{"rendered":"

A word from The Tim:<\/strong> This post is from long-time Seattle Bubble participant Tim Kane (a.k.a. “S-Crow”). As co-owner of Legacy Escrow<\/a> in Everett, Tim brings a unique perspective on the closing table.<\/span><\/p>\n

\n

Timing Closing?<\/strong><\/p>\n

\"ClosingOne question that frequently comes up when meeting with clients to sign loan documents is the question of \u201ctiming.\u201d\u00a0\u00a0 Is it financially beneficial to close earlier in the month or later in the month?\u00a0 In most cases the answer is that it makes no difference.<\/p>\n

Interest is paid on the existing loan through the payoff date and interest is collected or \u201cprepaid\u201d on the new loan from the closing date through the end of the month.\u00a0 The reason people often think that it is \u201ccheaper\u201d to close at the end of the month is because they are only looking at the \u201cprepaid\u201d interest.\u00a0 For example, if you\u2019re closing on the 10th<\/sup>, then the settlement statement would show 21 days of prepaid interest.\u00a0 If you\u2019re closing on the 20th<\/sup> then there would only be 11 days of interest.<\/p>\n

However, if you’re also selling a home at the same time, you need to remember to look at the number of days of interest being added to the payoff balance of your existing loan. Typically the interest rate on the existing loan is higher than the interest rate on the new loan, so it would be slightly more beneficial to close as soon as possible.<\/p>\n

Skipping Payments<\/strong><\/p>\n

<\/strong><\/p>\n

Many people like the idea of \u201cskipping\u201d a payment.\u00a0 Yes, you may not be making a payment directly to your mortgage company for one month (or sometimes 2 months) but interest is still being collected on the old loan until the time of payoff and interest accrues on the new loan from the closing date forward.\u00a0 You are not getting out of paying interest.<\/p>\n

One exception to this rule is if your existing loan is FHA.\u00a0 FHA does not prorate interest on a daily basis.\u00a0 The payoff balance will include interest through the end of the month.\u00a0 Therefore with FHA specifically, it is very beneficial to close your refinance at the end of the month to avoid paying interest on both loans at the same time.<\/p>\n","protected":false},"excerpt":{"rendered":"

A word from The Tim: This post is from long-time Seattle Bubble participant Tim Kane (a.k.a. “S-Crow”). As co-owner of Legacy Escrow in Everett, Tim brings a unique perspective on the closing table. Timing Closing? One question that frequently comes up when meeting with clients to sign loan documents is the question of \u201ctiming.\u201d\u00a0\u00a0 Is…<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[199],"tags":[771,50],"coauthors":[],"class_list":["post-15543","post","type-post","status-publish","format-standard","hentry","category-opinion","tag-closing","tag-escrow"],"yoast_head":"\nFinancial Closing Strategy: Is there a better time of month to close on a refinance? \u2022 Seattle Bubble<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/seattlebubble.com\/blog\/2011\/05\/09\/financial-closing-strategy-is-there-a-better-time-of-month-to-close-on-a-refinance\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Financial Closing Strategy: Is there a better time of month to close on a refinance? \u2022 Seattle Bubble\" \/>\n<meta name=\"twitter:description\" content=\"A word from The Tim: This post is from long-time Seattle Bubble participant Tim Kane (a.k.a. “S-Crow”). 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