interest credit: To Interest Credit, or Not to Interest Credit: That is the Question
- 04/17/14 03:58 AM
When your home purchase or refinance closes within the first days of the month (within 4-10 days, depending on the investor), you have the option to do an interest credit. That means your lender would credit you at closing with the days of interest for that month, and you would pay that interest in your first mortgage loan payment the following month. Interest Credit Example: Loan Amount: $260,988 Interest Rate/Term: 3.25%/30 year fixed Closing Date: June 3 Interest Paid at Closing: $0 1st Mortgage Payment: July PRO: Reduces the amount of cash you bring to closing. CON: Your first mortgage payment is sooner. Your other option would … (3 comments)
When your home purchase or refinance closes within the first days of the month (within 4-10 days, depending on the investor), you have the option to do an interest credit. That means your lender would credit you at closing with the days of interest for that month, and you would pay that interest in your first mortgage loan payment the following month.
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