When it comes to buying your first home, the date you close might feel like just a scheduling detail. But here’s the truth: closing early in the month vs. late in the month can swing your closing costs by thousands of dollars.
Let’s walk through a real example so you can see how this works.
Our Scenario
- Purchase Price: $400,000
- Loan Amount: $400,000 at 7%
- Annual Property Taxes: $6,000 (due Dec 1)
- Quarterly HOA Dues: $600
July 2 vs. July 27
Item |
July 2 Closing |
July 27 Closing |
|---|---|---|
| Short Interest | $2,301 | $384 |
| Tax Proration to Seller | $3,000 | $3,000 |
| Lender Escrow Requirement | $3,000–$4,000 | $3,000–$4,000 |
| HOA Proration to Seller | $587 | $424 |
| Total Due at Closing | $8,888–$9,888 | $6,808–$7,808 |
Why the Difference?
- Short Interest: On July 2, you owe nearly a full month of interest upfront. On July 27, you owe only a few days.
- Tax Prorations: Same in both cases — you owe the seller for July–Dec since they prepaid.
- Escrow Cushion: Same in both cases — lender still needs to prep for December’s tax bill.
- HOA Prorations: Slightly less if you close later in the quarter.
That’s a swing of $2,000+ in cash needed at closing — just by picking your date.
Why Buyers Should Care
Most first-time buyers are already stretching every dollar. Coming up short by even $1,000 at the closing table can mean losing the house and your deposit.
Knowing how your closing date affects your bottom line puts you back in control.
House Karma Tip
If you’re tight on cash, ask your lender if you can schedule closing in the last week of the month. It’s one of the simplest ways to lower your upfront costs. Just be careful not to slip into the next month — or you could end up owing a full extra month of short interest.
Bottom line: The home may be the same whether you close July 2 or July 27, but the money you need to bring to closing can look very different. Timing matters.
