‘Savings’ Is Only a Matter of Grace Period
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A recent Robert Bruss item (“Your Mortgage,” Oct. 20) said that a buyer could save money by closing escrow at the end of the month. He couldn’t possibly have thought that this was true. It only defers payment.
The escrow holder prorates interest, taxes and insurance based on the close of escrow. The buyers pay a daily rate for the time that they own the property regardless of what day of the month it closes escrow.
Although it’s true that buyers will be required to bring in more prepaid interest for a mid-month closing, they would enjoy a longer grace period before their first payment was due. Therefore there is no savings to close at the end of the month.
SANDY KENNEY
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