If you’re working with a real estate agent that’s advising you to schedule your closing for the end of the month because you’ll save money… They’re not only wrong, but might be setting you up for unnecessary delays, increased moving costs and a migraine.
Ask anyone who works in the closing or funding department for a mortgage lender and they will tell you that the volume and their overall workload doubles and sometimes triples the last few days of the month. So even if there’s no issue with your loan/closing, you may be looking at delays because of issues that they’re addressing with other loans.
While no system is fool-proof and delays are sometimes inevitable, staying away from the last few days of the month for settlement greatly increases the odds that your closing will go off without a hitch.
Do I save money by settling at the end of the month?
The short answer to this question is NO. Whether you settle on the 15th or 30th of July you’re first mortgage payment isn’t due until September 1st. So if you settle on the 15th you’ll pay the lender a few extra dollars in interest for July, but you won’t have a mortgage payment for 45 days. It all washes out.
If you want to save yourself some money at the settlement table… Make sure that you shop when looking for a mortgage, title insurance and homeowner’s insurance.
And yes, if you’re the buyer, you can also refuse to pay the one-time broker’s services fee or flat fee commission that many real estate agents and brokers tack-on for processing the transaction. Eliminating that fee alone will save you $250 to $700 on average. In my opinion, that fee is the “grand-daddy” of all “junk fees” and a reputable title company already provides the same services for you and it’s included in the cost of your title insurance.
Sure your agent or broker will probably push-back a little, but remind them that if it weren’t for you they wouldn’t be getting paid at all!