Should we close sooner so we can lock in our rate?

retroindigo · August 2012

We just signed paperwork to buy our first home! If all goes well we will be in attorney review in a day or so. The date we selected to close on our home is Oct. 26.. The lease on our apartment ends Oct. 31. Since we don't have many things and there's not much we want to do to the house right away, aside from paint a few rooms, we feel this gives us enough time to make the transition. However, that is 80 days from now so we can't lock in a mortgage rate until another 3 weeks. I'm concerned that the rates could go up in that time. I was quoted at 3.5% yesterday. Or, they could go down. Who knows? We have the option of moving closing up to Oct. 5 (we can't do the middle of the month because the listing agent will be away). But if we close earlier, I'm told we would have to pay the interest for October at closing, which is another $400 - on top of $800 in rent for October that we'd have to pay for and really wouldn't be living in the apartment for the whole month. What do you suggest? Thanks!!

Sisugal · August 2012

Is not your Oct rent already paid? (first and last month's rent initial deposit?)

GeorgiaRiah · August 2012

You don't usually pay your mortgage the first month so you have a little wiggle room if money is the issue.

LoveKiss · August 2012

It's a presidential election year. In election years gas prices and interest rates usually stay low. I know it's nerve wracking, but I don't think rates will rise significantly in the next 3 weeks. That said, 5 days to clean your new place, move out of your old place, and clean your old place is really tight. Would you consider closing a few days earlier than planned just to give yourself more breathing room?

HarleyKins · August 2012

I'd suggest speaking with your lender. If you are able to lock now, it may be a good thing. Some lenders let you lock at only 30 or 60 days out.

It's hard to predict the rate game - see the post ahead of yours on the boards about interest rates.

In past experience, as a realtor, if you are to close on Oct 26th, most likely your first payemtn will not be due until December. Payments are due 1-15th of the month so you do have some wiggle for your first payment - but be sure to get on track and pay it soon after the first.

I've also read that closings 1st-15th payments due following month. 15th-30/31st due following. Be sure to check with your lender.

Also if closing on October 5th, it gives you time to clean your apartment and do things around your new home - cleaning, shedding wallpaper, etc.

Congrats on your new home!

retroindigo · August 2012

Thanks for the feedback. I will have to inquire about the last month's rent. I have a feeling we didn't pay it. We've been there for 7 years so I kind of forget. Unfortunately, we can't lock in earlier - well, we can but we have to pay about $700, so it would make sense to just move the closing date up if we were to do that. The extra time to get settled could be nice, but we could also save more money if we stay in the apartment longer (less fees to pay up front and since our cost of living is low in the apartment, we might be able to sock away some more money to put toward closing costs so we're not dipping into savings too much.) I'm still torn, especially now that our apartment complex said we could move out earlier as long as we give 60 days notice, so we could move out of the apartment on Oct. 15 and close on Oct. 5 if we wanted to....

Quiksilver620 · August 2012

LoveKiss:
It's a presidential election year. In election years gas prices and interest rates usually stay low. I know it's nerve wracking, but I don't think rates will rise significantly in the next 3 weeks. That said, 5 days to clean your new place, move out of your old place, and clean your old place is really tight. Would you consider closing a few days earlier than planned just to give yourself more breathing room?

this

retroindigo · August 2012

Unfortunately we can't move in a few days sooner. It'd have to be Oct. 5. The listing agent is going away and our sellers are in their 80s and dont want to close without her.

Should we close sooner so we can lock in our rate?

Re: Should we close sooner so we can lock in our rate?

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