Closing Date
Definition of "Closing Date"
The date on which the closing occurs. On a purchase transaction, there is no financial advantage to the buyer/borrower in closing on any day of the month, as compared to any other day. Buyers should select the closing date as close as possible to the moving date, regardless of the day of the month that is. The interest clock on the loan starts ticking on the closing date, because the lender expects to be paid beginning the day the funds are disbursed. There is no point in paying interest before you are prepared to move. While borrowers pay interest beginning the closing date, they may pay it in different ways, depending on when during the month they close. The first payment on a home loan is due on the first day of a month and includes interest for a full month. Since loans may close anytime within the month, there is always an interest adjustment at closing based on the exact closing date. This is Per Diem Interest or 'prepaid interest.' Closing on different days during the month will shift the amount of interest you pay at closing, but will not affect the total interest you pay beginning at closing.
Popular Mortgage Terms
A credit report contains detailed information regarding the relationship history of an individual with several financial institutions. How do I get a Credit Report?You ask a credit bureau. ...
A lender who offers mortgage loans directly to the public. ...
Same as term Negative Points: Points paid by a lender for a loan with a rate above the rate on a zero point loan. For example, a lender might quote the following prices: 8%/0 points, ...
The amount invested in a house, equal to the sale price less the loan amount. The House Investment Decision: Lenders impose the upper limit on how much a household can spend for a house. ...
A mortgage that can be moved from one property to another. Ordinarily, you repay your mortgage when you sell your house and take out a new mortgage on the new home you purchase. With a ...
Equations used to derive common measures used in the mortgage market, such as monthly payment, balance, and APR. ...
The longest period for which the lender will lock the rate and points on any program. On most programs, the longest lock period is 90 days; some go to 120 days and a few to 180 days. It ...
A borrower with the best credit rating, deserving of the lowest prices that lenders offer. ...
On an ARM, the assumption that the value of the index to which the interest rate is tied does not change from its initial level. ...
Have a question or comment?
We're here to help.