I’ve always known/believed that homes in Charlottesville (and more real estate markets) close at the end of the month â€¦ But I’ve never looked at the numbers until now. Because I had to look at each day individually as there’s no automatic report, I chose June 2011 as a representative month.
Simply put, a buyer has to bring a little bit less cash to closing if you close at the end of the month.
When you close on a home, you’re required to prepay any interest that will accrue on your mortgage from the date of the transaction until the end of the month. So the closer your closing is to the end of the month, the less you have to pay.
But interest accrues from the date of closing. If you close April 15, you will also owe 15 days of interest for April. Your lender will therefore add this amount (sometimes called pre-paid interest) to your closing costs. If you close April 29, you will only be charged for two days of interest.