There are advantages to buying homes seasonally: March and April are usually the hottest months for sellers, while buyers are more likely to get a better deal in the winter, when demand is lower. However, many people don’t know that buyers can save money by closing at a certain time during the month. There are a number of financial incentives to closing later in the month. Here are three reasons you’ll save money if you wait untill the last couple of days to buy.
1. Save on Prepaid Interest
Mortgage payments are different than most monthly payments. The interest is collected in arrears which means that you pay the previous month’s interest along with the current month’s principle. Interest begins accruing the day you close on a house which leads up to your first payment. You’ll pay that interest in addition to any closing costs prior to beginning your actual monthly payments.
2. Get the Most Out of Your Final Rent Check
No one wants to pay rent and mortgage at the same time. If you close on a home as close to the end of your rental agreement as possible, you’ll prevent payment overlap.
3. Get a Better Deal on Home Prices
Many sellers want to start the new month with no extra payments, which could mean lower prices for you. Sellers who are moving and buying another property will be motivated to sell their home quickly as the end of the month approaches, even if it means lowering the price.