Many home buyers don’t realize the importance of their closing date. As a buyer, it’s very important that you have a say in selecting the closing date for your new home. The date you choose can play a big role in saving you money and ensuring a smooth moving experience.
When choosing your closing date, there are some important things you need to keep in mind. First, it often takes about 45 days for lenders to approve financing. So, you have to make sure you give yourself plenty of time to secure the financing you need to purchase your new home. But it’s also important to keep the seller happy too. If you try to insist on a closing day that the seller isn’t happy with, they could decline your offer and you’d miss out on your dream house.
So, how can you make sure you choose the right closing date on your new home? Here are a few tips to keep in mind.
- Aim for a closing date near the end of the month—In most cases, and end-of-the-month closing date is the best option for the buyer. Why? There are numerous reasons. If you’re a renter, you’re likely locked in a lease that you pay at the beginning of each month. So, if you pay your rent on the 1st and move out on the 10th, you’re wasting all of that previously paid rent. By staying in your apartment until closer to the end of the month, you’ll get a better value.
But that’s not the only reason you should try to schedule your closing date near the end of the month. Choosing a closing date at the end of the month can save you money on prepaid interest that you have to pay. In most cases, the borrower prepays interest to cover the time from the closing date until the end of the month. Therefore, the earlier you close in the month, the more prepaid interest you’ll have to pay. This can make a big difference if cash is tight for you at the moment.
- Schedule your closing for when you’re ready to take ownership of the new home—A lot of times, buyers make the mistake of closing too early on their new homes. They close on the home but aren’t ready to move in or to start making renovations, so they end up paying on a home that they’re not even ready to start using.
Make sure you have all of your ducks lined up in a row so that you’re closing at the time you’re ready to truly take ownership of your new home, whether that means moving in immediately or starting to make renovations.
- Don’t push your luck—Remember, the buyer needs to be happy too. They want to sell their home, and timing matters to them too. If they’re currently living in the home, you have to choose a closing date that works with their new living arrangements. Of course, you don’t want to make them wait longer than they are comfortable with to close the sale either. The key is to make sure both you and the seller are happy with the closing date chosen.