Mar 042015

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By G. Steven Bray

The National Association of Realtors recently released data showing the most popular days to close a home purchase. The top 7 were the last days of a month, and in the top 25 most of the remaining ones were Fridays.

From a mortgage perspective, your choice of closing date effects the amount of pre-paid mortgage interest. At closing, you prepay interest from the closing date to the end of that month. If you close at the end of the month, you prepay less interest than if you close on the 10th, but you also would enjoy the home for 20 fewer days, and you paid an extra 20 days to live wherever you were previously.

Some cite the desire to have a weekend for moving to explain the concentration of closings on Fridays. Month-end closings may coincide with the end of leases for renters. Sellers with FHA loans may prefer month-end closings because FHA charges a full month’s interest regardless of when closing occurs (but that policy recently changed). And it just feels better to close before you turn the page on the calendar.

The takeaway is if you can close in the middle of the week or month, you’re likely to encounter less stress, and you might even save some money from service providers like movers.

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