Don’t Refinance Your Mortgage on This Day of the Week — Timing Is Everything
Written by
Tiffany Lew
Edited by
Molly Sullivan
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Various factors influence a mortgage rate, but can the difference come down to the day of the week? In fact, there are some considerations to timing your mortgage refinance, even down to the date.
Here are some reasons why those looking to refinance their mortgages should probably avoid closing on Fridays. It turns out the imminent weekend — and therefore close of business — brings on too much of a gamble.
You Could Get Double-Charged
It’s not just your anxiety talking. Your old lender doesn’t receive payoff funds from your new one until the following week, which means you’re paying interest on both loans over the weekend. It’s not certain, but it is concerning enough to dodge if you can help it.
“The situation where you could be paying interest on both loans is a possibility,” said Adam Hamilton, CEO, REI Hub. “Because Friday can mean delays, your original lender may not get their payment by end of day that Friday, which means that over the weekend you could owe interest on both loans. You just want to keep in mind that when Friday rolls around, things might not get completed as quickly. And, with two weekend days following right after, that means you could be facing delays of several days, where you also may not be able to communicate easily with anyone.”
The Interest Rate Could Shift Under Your Feet
Fridays also tend to be volatile for other overarching, governmental reasons. The Bureau of Labor Statistics releases its Non-farm payrolls report on the first Friday of each month, which has an effect on mortgage-backed securities.
Non-farm payrolls can affect stock prices by influencing the interest rate environment. A strong jobs report may lead the Federal Reserve to raise interest rates to prevent an overheated labor market or curb inflation, leading to stock prices declining. Meanwhile, a weak jobs report may lead the Federal Reserve to keep interest rates unchanged or even lower them.
Bottom Line: Be Wary, Not Worried
However, don’t neglect to consider other, bigger factors for refinancing your mortgage, including spotting monthly mortgage rate trends, and considering pros and cons, such as the closing costs of potentially securing a lower interest rate.
Ultimately, your approach can go in multiple directions. Friday’s risks exist in the context of these much slower and larger influences on your lending rate. Even so, when making huge financial moves, every concern you can resolve is a relief. Be sure to discuss these possibilities with your contacts at both the old and new institutions. They may guide you around the pitfalls.
“Ask questions,” said Nathan Young, founder of mortgage lender North Star Mortgage Network, to CBS News. “Push back — respectfully. A good lender will be transparent and work with you.”
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