Nov 27, 2018
Does closing a home loan at the end of the month matter? Is there any economic difference between closing on the 1st of the month versus the end of the month? Do you understand the what interim interest is. At the end of episode 31 of the Martini Mortgage Podcast, with Kevin Martini's help, you you will have clarity of the differences between closing at the beginning of the month and the end of the month.
Kevin Martini called Episode 31 of the Martini Mortgage Podcast the Month End Myth. This special podcast was recorded because many people believe that closing at the end of the month matters hence, the month end myth! Why one believe the myth is not important. What matter is understanding that closing on a mortgage at the first of the month or closing on a mortgage in the middle of the month or closing on a mortgage on the last ay of the month you cost are all the same.
HOW DOES MORTGAGE INTEREST WORK? it is not noice to know, it is important to know that: Mortgage interest in ONLY paid when you have used the money. Mortgage interest is paid in arrears.
“When a mortgage payment is due on the 1st of the month, it is actually for the previous month interest…this is in contrast to renting” KEVIN MARTINI
Rent, generally, is paid on the 1st of the month and you are paying for the month in advance. In the mortgage world, you are paying your interest in arrears. All mortgage payments are due on the first of the month. Since there are many options of days when one can close on a real estate transaction, this could cause a wealth of mortgage due dates. To resolve this and to keep everything uniformed with a first of the month due date and to keep mortgage interest paid in arrears there I something called interim interest. Interim interest is paid at the closing table. It is my opinion, interim interest should not be considered a real closing cost.
In episode 31 of the Martini Mortgage podcast, Kevin Martini goes into more detail of interest interest. In addition, Kevin Martini shares the economics of closing on the first of the month and closing oat the end of the month.
SPOILER ALERT: the cost of closing a loan are exactly the same regardless when one closes.
Kevin Martini is not just the host of the Martini Mortgage Podcast he is also the Senior Mortgage Strategist and Branch Manager of the Martini Mortgage Group at Benchmark Mortgage.
If you or someone you know has questions about when to close or would like to talk about the unique strategy that Kevin Martini deploys with the help of his trusted real estate Partners that requires less money at the closing table but provides no need for first payment until a little over 60-days, then call (919) 238-4934 and talk to Kevin Martini or one of his Mortgage Strategists.