By Lydia Blair
One of the quirks of the title industry is the roller-coaster pace of business. A week day in mid-January can be as boring as watching paint dry. The last Friday of the month in the summer feels like bungee jumping into fire.
While title companies are generally glad to close a transaction, some days are a lot more welcome than others. The last day of the month is usually the busiest time for title companies and lenders. Fridays are the fullest days of the week.
I’ve suspected that mortgage companies were pushing for these days to close out their month or week with more business. But that is probably not correct.
“A purchase transaction closing date is typically driven by the agreed upon date in the contract,” says Kyle Trafton, Director of Mortgage Services at Inwood Mortgage Group. So, it’s the real estate agents to blame for our closing days running so hot and cold? Apparently not.
“We see many closings happen towards the end of the month to minimize daily per diem interest on the new loan, therefore reducing the buyer’s cash to close,” Trafton adds. “Additionally, if a buyer is currently renting a property, leases run through the end of the month, and they may be attempting to minimize duplicate days of rent expense and interest on the new loan.”
Well that makes sense. FHA loans can add an even greater factor in the interest expenses depending on when they close in the month.
If as a buyer or seller, you want special time and attention during your closing, avoid the last day of the month. You’ll also have more choices for closing times if you steer clear of Friday deadlines. Try to schedule your closing on a Tuesday or Wednesday during the middle of the month to give your transaction the most time and consideration.
When it comes funding your transaction, morning closing times are best. There are a lot of steps that need to happen between the signing and the actual funding and finalizing of the deal. Much of the work is done electronically, but they are all driven by humans who must sort, send, read, code, crosscheck, file, etc.
“We try to tell folks to finalize the closing by 3 o’clock at the latest,” advises Trafton. That usually means both the seller and the purchaser getting a mortgage should start their closing earlier to allow signed documents to be reviewed before the deal is complete.
“If it’s a purchase transaction, the documents have to be sent to the lender for funding and to allow time for review,” he says. “There may be multiple parties involved.”
No one wants to be that about-to-be-new-homeowner waiting for the keys to the house on a Friday afternoon with the moving van idly parked out front. And no one wants to be the escrow officer or agent telling them that they aren’t getting the keys until Monday because they’ve missed the wiring deadline, or the deal hasn’t funded yet. I’ve been there and it’s a 5 o’clock unhappy hour.
Help us create a calmer environment for all parties involved by scheduling your closing day and time to allow enough time for your transaction paperwork to be processed. It makes for happier moving days.
The opinions expressed are of the individual author for informational purposes only and not for the purpose of providing legal advice. Contact an attorney to obtain advice for any particular issue or problem.