The worst day to close on a house

When you’re waiting to close on your dream home, it can be tempting to push for the soonest possible closing date. However, there may be some benefits to waiting for the right day to come along and you want to make sure you don’t accidentally pick the worst day to close on a house. 

While you won’t get a full say in your closing date — the other parties involved get a say too) — you can try to push for the day of the week that works best for you. 

What is closing on a home loan?

Closing on a home loan, also known as settlement, is the final step in the real estate transaction, where the property officially changes ownership from the seller to the buyer. This is a formal process during which all necessary legal and financial documents are signed, and the buyer completes the purchase. The closing typically takes place at a title company, escrow office, or attorney's office and involves various parties, including the buyer, seller, real estate agents, and lenders. 

During the closing, both the buyer and seller review and sign the mortgage documents, transfer the funds required for the purchase, and pay closing costs and fees. Once everyone signs all the closing documents and the funds transfer, the property's title is transferred to the buyer, and they receive the keys to their new home.

Pay attention to the time of month you close 

As it turns out, the exact day of the week you close isn’t as important as the time of the month you choose to close on a home loan. That’s because your closing date can impact you financially. Typically, most borrowers opt to close at the end of the month to avoid paying extra mortgage interest due to how the interest accrues. 

Mortgage payments are due at the beginning of each month. If you close on your home early in the month, you won't make your first mortgage payment until the following month. Waiting to make that first payment gives homeowners the impression they skipped a payment — which can feel like a major win when dealing with all the new expenses that come with moving and homeownership. However, this is not entirely accurate. While you delay making a payment, you're still accruing interest for the period. Closing on the first day of the month means you pay 28 to 31 days' worth of interest for that month. In contrast, closing at the end of the month results in only two to three days' worth of interest for that month.

Closing date examples

Here’s an example of how this can work. If you're buying a $350,000 house with a 7% interest rate, closing on September 1 would cost you roughly $2,013, in interest for the first month. Closing on September 15, you'd pay only $1,007 in interest for that month. 

The total interest paid over the life of the loan remains the same, but an early-month closing means you pay significantly more interest upfront. Closing at the end of the month won’t save you any money in the grand scheme of things, but can take a little pressure off you in those very early days of homeownership. 

Here is a breakdown of how you can calculate how much interest you will owe based on when you close:

• Multiply the loan amount by interest rate to get total interest per the year: $350,000 * 0.07 = $24,500
• Divide the total interest per the year by 365 to get the daily interest amount: $24,500/365 = $67.12
• Multiply the daily interest by the number of days remaining in the month: $67 * 30 = $2,013

Advantages to closing at the beginning of the month include a longer gap between paying closing costs and the first mortgage payment, an easier time scheduling the closing due to lower demand, and reduced risk and stress from the end-of-month rush. However, the disadvantage is the substantial additional interest payment. 

At the end of the day, you might not get much of a say when it comes to the time of month you close on the home loan. If you are buying a home in a seller’s market, you may need to close when is best for the current owners since they may have a bit more leverage than you. 

The worst day of the week to close on a home loan

Closing earlier in the week is better if you want to avoid frustrating delays should something go awry. The worst day to close on a house is Friday. Even if your team of agents, brokers, and lenders are willing to meet on a weekend, the loan transaction likely won’t be processed until Monday or later if it’s a three-day weekend. 

Even worse is closing on the last Friday of the month. Closing on a Friday leaves little room for error, especially if issues arise during the closing. The last Friday of the month, in particular, is discouraged due to the high volume of closings and the potential for mistakes.

The best day of the week to close on a home loan

Once you determine what time of month you want to close on the home sale, you can try to choose a day of the week that works best for you. The best day to close on a house is generally considered to be Tuesday morning, especially early in the month.

Essentially, opting for a midweek closing gives you time to address any mistakes or discrepancies that might occur during the paperwork process. If closing day problems arise on a Tuesday for example, it can be easier to rectify them before the weekend, helping you extend how long it takes to close and avoid stress. 

What day should I close on a house?

At the end of the day, you can close a home loan Monday to Friday, any day of the month, and chances are things will work out just fine. Closing earlier in the work week can give you a bit of a buffer to resolve any issues that arise before the weekend, but in most cases, nothing will go wrong. How much you need to worry about your closing date may depend more on if you have a very specific move-out date at your current residence you need to meet or if you booked movers for a certain move-in date. You can work with your real estate agent and mortgage lender to find a closing date that will make navigating the homebuying process less stressful. 

FAQs

Here are more details about the worst closing day.

Are there any specific months or seasons to avoid for closing on a house?

Some homebuyers prefer to avoid closing during peak real estate seasons (spring and summer) when there is higher demand and increased competition. This can potentially lead to higher prices and slower processing times.

What are the potential advantages of choosing a mid-month closing date?

Closing in the middle of the month can be advantageous for buyers, as it may result in lower prepaid interest costs at closing, given that interest is typically paid from the closing date until the end of the month.

Can you choose your closing day?

In many cases, buyers and sellers can negotiate and agree upon a closing date. However, it's essential to consider factors such as the time required for loan approval, inspections, and other contingencies that may impact the chosen date.

What do you need to bring to closing?

You typically need to bring several essential documents and items to a home loan closing. These documents include a government-issued photo ID (such as a driver's license or passport), a cashier's check or proof of wire transfer for the closing costs and down payment, proof of homeowners insurance, the closing disclosure provided by your lender, and any other documents or paperwork requested by your mortgage lender or title company.