Three reasons to buy a Boca Raton home at the end of the month.
Although there are no hard and fast rules on what time of the month is best to close a home purchase, here are 3 reasons it may make sense to buy a Boca Raton home at the end of the month.
1. If you’re renting, you won’t pay rent plus mortgage
Most people who are renting apartments pay their rent on the first of the month. If you set the close of your Boca Raton home close to the beginning of the month, you have to move out of your apartment at that time. But you have already paid for your residency until the end of that month. Plus, your mortgage interest begins the day you move in.
If, however, you buy a Boca Raton home at the end of the month, you are making use of the money you have already paid out for rent.
2. Your prepaid interest payment is less.
After you buy a Boca Raton home, you’ll be paying interest as well as principle on your mortgage. You will also be paying your house taxes. Both of these payments are made in arrears. That means you are not paying in advance; instead you are paying for the time you’ve lived in the property. So if you close on your Boca home at the end of the month, you pay interest only on the two or three days you’re in the home.
Some additional good news that your Boca Raton realtor will tell you about: on closing day, you have approximately a month after move in before you make your first mortgage payment. It’s not that you’re saving any money, it’s just that you will have prepaid your first month at the closing.
3. Seller’s anxiety at month’s end may lower the price – or not – but it may make your deal work.
People selling homes want to leave. That’s why they are selling.
At the end of each month they haven’t sold, they are less happy. That’s because they know that the beginning of each month marks a new set of payments for them, whether of mortgage, homeowner association dues, taxes, water, electric, pool maintenance, etc.
When you buy a Boca Raton home, you will assume those payments. So if, for example, if your Boca real estate agent brings your offer in late July but you are willing to close at the end of August, you will relieve a great deal of the seller’s anxiety. A short close means less out of pocket cost for them and a quick end to their home expenses.
A quick close may be the most price-effective when dealing with Boca Raton REO (aka foreclosure) properties. Banks want to get rid of these non-performing assets as fast as possible, because every day they carry these properties is a further drain on profits.
However, if you cannot buy a Boca Raton home at the end of the month, do not despair. While early month closings require more cash to close, they also allow you more time between closing and first mortgage payment.
Marc Jablon, the Jablon Team
Re/Max Complete Solutions