A friend says that a mortgage loan usually closes at the last week of the month. Is this true?
lhee asked:
We have refinance our mortgage last April and until now it is not done yet. We have been waiting for our agent’s call for the signing of the loan doc. Now a friend says since June has already started we have to wait for another three weeks because he said loan usually closes few days before the end of the month. How true is this?
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We have refinance our mortgage last April and until now it is not done yet. We have been waiting for our agent’s call for the signing of the loan doc. Now a friend says since June has already started we have to wait for another three weeks because he said loan usually closes few days before the end of the month. How true is this?
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Tags: April, Doc, Refinance Mortgage
February 24th, 2009 at 10:56 am
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Not true at all. They close whenever all the paperwork is done. No matter what day it is.
February 24th, 2009 at 6:57 pm
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No truth in that. Many loans are closed each month and they can’t all be held till the last week. The payments, of course, will be adjusted to be due in a reasonable time from the closing.
February 24th, 2009 at 11:14 pm
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Not true.
There are a few reasons why your loan is not done yet.
1.Your agent went out of business.
2.Your agent could not finance the loan and is stringing you along.
3.Your agent is waiting for documents from a 3rd party (appraiser, etc) and forgot about them and you.
The average time to “do” a loan is 4weeks. That is from the time you submitted your application to the time it funds. Call your loan officer and find out what is going on. I would find another loan officer. One that keeps you updated on at least a weekly bases.
Mjloaninfo.com
February 25th, 2009 at 3:36 am
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You can close any day (well any business day anyway). The reason most loans close at the end of the month is you generally pay the loan interest from the closing date to the end of the month, and if you don’t close near the end of the month that closing cost is therefore higher. So if you close the middle of the month you’d have half a month interest to pay at closing, while if you close near the end of the month it’s only a couple of days.
It’s done that way so all mortgage payments are due on the first of the month. It certainly isn’t for the convinience of the borrower - I assume it is to make it easy to sell the loans to investors.
February 25th, 2009 at 1:38 pm
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It used to be true, but in’t anymore. Back when all mortgages calculated interest on the last day of each month, everyone tried to close on the last day to avoid interest.
Today, most mortgages are either pro-rated or they calculate interest based upon the actual day of closing. Closings now take place all month long.
February 25th, 2009 at 7:22 pm
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It is not true that you have to wait. Whatever day of the month you close, whether it is June 1st or June 30th, your first payment will still start August first. the difference is the interest. You will need to pay the interest at the closing for the month of June. So you could pay as much as 30 days of interest or just 1 day. It all works out the same in the end. So close when you are ready.