MORTGAGE REFINANCING

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rustantosuprih@gmail.com (mortgagebox team) — Mon, 30 Nov 2009 09:11:00 PST

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rustantosuprih@gmail.com (mortgagebox team) — Mon, 30 Nov 2009 05:28:15 PST

Should I Refinance?

Refinance Calculator © ML

Loan Source: Junior Lien Loans

rustantosuprih@gmail.com (mortgagebox team) — Tue, 01 Dec 2009 20:23:14 PST

Summary :
Most lenders who make first lien mortgage also provide second mortgages. These include savings and loan associations, mortgage bankers, and commercial banks. In fact, you may want to make your first inquiry for a second mortgage loan at the lender that holds your first mortgage, especially if the relationship has been good.
By. Mortgage Team

Because second mortgages are usually smaller and have a shorter term than first mortgages, there is a greater range of lenders of involved. Traditionally, consumer finance companies have done most of the second mortgage lending when the purpose of the loan is to raise cash. These firms advertise in the newspaper and can be found in the classified section of the phone book under “loan.” Many of these companies are independent and locally owned, but some are affiliated with major national corporations.

ith the advent of the home equity loan, commercial banks have aggressively marketed second mortgages. Terms may be very attractive, as the bank is interested in bringing in new costumers for other services such as checking accounts and credit cards.
In some cases, you may arrange with relatives or friends to obtain a second mortgage loan. This is for special situations, such as help in making a down payment on the home or getting through a temporary financial difficulty.

Companies that make home improvements may also provide financing for the services. They generally sell the loan to bank or finance company for cash, which they need to stay in business. You would probably be better off approaching a lender yourself, unless you don’t have the time or inclination to do so.

When shopping for a second mortgage loan, look at the terms offered on first mortgage loans. In addition, you may wish to try to minimized the cost of the opening the loan, particularly if the loan amount is relatively small. A second loan involves many of the same underwriting procedures applied to first loans. This may include an appraisal of the home, a survey, and a credit check. Some lenders will waive fees or charge nominal fees for origination.

You may be able to arrange a second mortgage loan as part of a package that also includes a first mortgage. These so-called “piggyback loans” have the advantage of avoiding the mortgage insurance that would have to be carried on first loan more than 80 percent of value.

Loan Source: Junior Lien Loans

rustantosuprih@gmail.com (mortgagebox team) — Sun, 29 Nov 2009 23:28:05 PST

Most lenders who make first lien mortgage also provide second mortgages. These include savings and loan associations, mortgage bankers, and commercial banks. In fact, you may want to make your first inquiry for a second mortgage loan at the lender that holds your first mortgage, especially if the relationship has been good.

Because second mortgages are usually smaller and have a shorter term than first mortgages, there is a greater range of lenders of involved. Traditionally, consumer finance companies have done most of the second mortgage lending when the purpose of the loan is to raise cash. These firms advertise in the newspaper and can be found in the classified section of the phone book under “loan.” Many of these companies are independent and locally owned, but some are affiliated with major national corporations.

With the advent of the home equity loan, commercial banks have aggressively marketed second mortgages. Terms may be very attractive, as the bank is interested in bringing in new costumers for other services such as checking accounts and credit cards.
In some cases, you may arrange with relatives or friends to obtain a second mortgage loan. This is for special situations, such as help in making a down payment on the home or getting through a temporary financial difficulty.

Companies that make home improvements may also provide financing for the services. They generally sell the loan to bank or finance company for cash, which they need to stay in business. You would probably be better off approaching a lender yourself, unless you don’t have the time or inclination to do so.

When shopping for a second mortgage loan, look at the terms offered on first mortgage loans. In addition, you may wish to try to minimized the cost of the opening the loan, particularly if the loan amount is relatively small. A second loan involves many of the same underwriting procedures applied to first loans. This may include an appraisal of the home, a survey, and a credit check. Some lenders will waive fees or charge nominal fees for origination.

You may be able to arrange a second mortgage loan as part of a package that also includes a first mortgage. These so-called “piggyback loans” have the advantage of avoiding the mortgage insurance that would have to be carried on first loan more than 80 percent of value.

P. S. See my post about that, “canceling or avoiding private mortgage insurance” for more description

Loan Sources: First Lien Loans

rustantosuprih@gmail.com (mortgagebox team) — Sun, 21 Dec 2008 00:08:16 PST

A first lien loan is the mortgage placed on the home before any other loans are taken out. It is usually the loan you use to buy the home and may be the largest loan on the home. The lender of a first lien loan has first claim on the home in the case of default.

There are several types of lenders who specialize in making loans on homes.

S&Ls and MSBs. These are savings and loan associations and mutual savings banks – depository institutions that offer checking and savings accounts and use the money to make loans. Most of these institutions also operate mortgage banking operations, which makes available to them a wider variety of loans they can keep or sell. Because of certain regulations, most of the loans they make are home mortgages. The institution you deal with will probably be a local association or branch, but in some cases out-of-town lenders will be actively making loans in your area.

Mortgage Bankers. These companies make loans and sell them to investors. Incidentally, it makes little difference who owns your loan. It does make a difference who services your loan, that is, who collects the payments and handles the escrow account. In many cases, the lender who originated the loan will service it. However, it is becoming more common for loans made by local institutions. Servicing entails collecting your payment and making sure that sufficient insurance is maintained and property taxes paid.

Mortgage Brokers. These firm operate much like mortgage bankers. However, they do not use their own money to originate loans. Instead, they find the type of loan you want and originate the loan for the lender chosen. A broker may represent a number of lenders. They can help you choose from among an array of loan types. Often, they can find loans that cater to special problems, such as a borrower without an established credit record. Brokers operate on fees that lenders pay for submitted loan applications.

Commercial Banks. Although banks specialize in short-term and business loans, they are becoming more active in home mortgages, particularly adjustable-rate loans. Physically, banks and savings and loans are similar. Banks generally have the word “bank:” in their title, while S&Ls often use the word “savings.” Either uses the word national or federal in its title, it is chartered by the Federal Reserve System (for bank) or the Federal Loan Bank Board (for savings and loans or mutual banks). Others are chartered by a state authority. The difference may affect the types of loans they are allowed to offer.

Credit Unions. If you are a member of credit union, you may be able to get a mortgage loan from this source. Credit unions specialize in smaller, short-term loans but may offer some types of home loans.

Stockbrokers. If you have an account with a stock brokerage firm, you may be able to secure a mortgage there. Most stockbrokers, even discount brokers, offer mortgage loans. If you portfolio is substantial, you may receive favorable terms on the loan. Many brokerage houses offer a “pledge asset” mortgage that obviates the need for a big cash down payment. If you pledge the portfolio as collateral on the loan, you may borrow up to 100 percent of the value of the home. Of course, you cannot liquidate the portfolio while it is pledged and you may have to add securities or money if the stocks fall in value.

Sellers. When buying a home, it is also possible to obtain financing from the seller, especially one who is anxious to move. The mortgage rate buyer and seller agree upon may represent a happy compromise between what the seller could earn on money in the bank and what the buyer would have to pay for borrowed funds.

Refinancing Options. If you are refinancing a first mortgage, you may want to check with the original lender first. It may be possible to avoid some of the closing cost, especially if the loan was made within the past few years. You have established a payment record with the lender, so a new credit report shouldn’t be needed. Also, it may be possible to use the original survey.

P.S. If your lender refuses to waive these cost, you may want to consider other lenders.

Types of Lending Institutions

rustantosuprih@gmail.com (mortgagebox team) — Fri, 19 Dec 2008 05:07:41 PST

Most mortgage lenders, such as bank, sell off their loans to investors after the closing ; often, even the right to service the loan (collect payments for a fee) is sold. Consequently, the identity of the original lender often doesn’t matter to the borrower, who may begin dealing with someone else even before making the first payment. ( other post)

Guidelines of income required for various types of loans are described in key 18. Some lenders will prequalify you, that is, tell you how large an amount you can borrow. That can give you confidence, when shopping for as house, that you will be able to close, and will also expedite the closing time. However, most lenders won’t take you seriously until you show them a signed contract to buy a house.

When you approach a lender, have all of your financial papers in order. Make a list of your account: checking, savings, and debts. Include account numbers and balances. Bring copies of car titles. Bring a list of securities to show dividend, interest, and royalty income. If you own rental property, bring something to prove you get rental income. If either spouse is discovered, show proof of alimony and/or child support, whether paying or receiving. List your job for the past ten years, with addresses, phone numbers, income, and supervisors. Bring W-2 forms for the past two years and your form 1040.

Your lender will want a copy of the sales contract (not necessary for a refinancing) plus details of all the other items noted above. Help the lender to verify as this will expedite the loan process. The lender will want money for a property appraisal (about $400) and credit check ($50). Ask your lender how long the process normally takes. Call back regularly to be certain there are no unusual snags.

P. S. Your seller and broker will also appreciate being kept informed of your loan approval

Loan Shopping On Interest Rates

rustantosuprih@gmail.com (mortgagebox team) — Mon, 15 Dec 2008 11:48:18 PST

If you’ve been waiting to see when interest rates will bottom out before buying, you know how difficult that can be. When are falling, there’s a temptation to wait for a further decline before buying. But then rates can turn up sharply, and the opportunity may slip away. On the other hand, if you buy (and afterward interest rates drop even further) you may have an opportunity to refinance. Refinancing is replacing your old mortgage with a new one.

Whether it is the original mortgage or refinancing, shop carefully for the best mortgage you can. A real estate broker can be helpful, but plan to spend several hours on the phone asking for rates. Some newspapers print mortgage rates offered by local lenders once a week. That, too, is useful information, but be sure to call and verify. Take out the Yellow Pages and call every lender. Ask for rates, points, and all other cost for the type of loan (e.g., FHA, fixed rate, ARM) and repayment schedule that you want. Make a chart on which you enter each lender’s name, phone number, loan officer, rate, points, fees, lock-in period, and application fees. Often local newspapers compile a similar table and print it weekly in their business or real estate section.

These tables may have week-old information, so they should be used as a guide and not as a complete substitute for the one you compile yourself. The mortgage business today is as much national as local, so you may want to include some large loan companies ion your matrix. Finding information about loan term is relatively easy over the internet, try it.

You might also ask friend about their experiences with their lenders. Many times it is better to deal with a lending institution that has an outstanding reputation than to attempt to get the best terms. If you are working with a real estate agent, do not hesitate to ask for a referral. Agents work closely with lenders and they know which ones are the best for completing a sale. Recognize that federal law discourages an agent from referring you to a lender because that lender offers to pay the agent a fee. However, agents may refer you to a lender with ties to the brokerage firm, or the agent may have access to a computerized network that can process loans. There are disclosures required to alert you these arrangements, so you probably do not have to worry about being taken advantage of in such cases. On the other hand, you should have a general idea of what kind of term are available in the market before you select a loan through these types of referrals.

Rates have a way of changing quickly; so ask about the length of the lock-in (the period for which their rate quote will be valid) and the amount of the application fee. Some lenders will offer a 60-day lock-in but may want a 1% nonrefundable fee. Others will refuse to lock in, especially when rates are volatile, giving you the prevailing rate at closing. Beware of the lender with the lowest quote and a long lock-in.

Tax Considerations

rustantosuprih@gmail.com (mortgagebox team) — Tue, 01 Dec 2009 20:53:16 PST

The interest you pay on a mortgage loan can, in most cases, be deducted from your income tax purposes. This deduction provided by the tax law is a key to reducing the cost of owning a home.
To use the deduction, the home must be your principal residence or a second home you use at least part of the year. (rental properties have their own special rules). If the loan is the original one you used to buy the home, or was used to improve or construct it, you can deduct all interest paid on up to $1 million of the loan balance. If you have refinanced the loan or added a second mortgage since purchase, you can deduct interest paid on any loan balance up to $100,000 (over the balance on the original loan).

For example, suppose you buy a home with a loan of $280,000. Five years later, you refinance the mortgage with a new loan of $400,000. The balance on the old loan was $275,000. You can deduct interest on $275,000 of the new loan, plus another $100,000 of the new loan, for a total of $375,000. The amount of interest you paid on the remaining $25,000 of loan is considered personal interest, which is not deductible. However, if $25,000 or more had been spent to improve the home, such as to add a room, then all of the interest would be deductible as housing interest.

Another example shows how much you can save from the tax deduction. If you get a mortgage loan for $50,000 at 10% interest for 30 years, you monthly payment is $438.79. Over the first year, you will pay $5265.43, of which $4987.43 is interest. By deducting this interest on your tax return, you will save $196.48 in taxes (at a tax rate of 28%). This means that the real cost of your mortgage payments is only $322.41 per month.

Keep in mind that if you don’t itemize your deductions, you can take the standard deduction of $7,350 for a married couple in 2001. Therefore, only the amount of itemized deduction above the standard deduction actually represent tax savings. In the example above, if you had no other itemized deductions, you would be better of taking the standard deduction, and deductibility of interest would be of no practical benefit. Note that itemized deduction amount begin to phase out (diminish) when income exceeds around $129,000 for married tax-payers filing a joint return in 2001 (half that for singles). The exact income limit is indexed and increases each year. Consequently, for very high-income homeowners, there is no tax benefit derived from financing a home.

In some cases, you can deduct discount points paid to get a mortgage loan to buy a house, but not for refinancing. The points must be customarily charged in your area. If you write a separate check for these points, rather than let the lender deduct the amount from the loan, these points are tax deductible in the year they are paid. However, if the loan was used to refinance an existing loan rather than a new purchase, you cannot deduct discount points in one year.

P.S. you must spread the cost of the point over the life of the loan.

Law of Leverage

rustantosuprih@gmail.com (mortgagebox team) — Tue, 01 Dec 2009 20:53:08 PST

Anytime you use borrowed money to make an investment, you are using leverage. In the case of buying a home, you probably have little choice other than to get a mortgage loan. Very few can afford to buy a home with all cash. However, even if you did have that much cash, you might still want to borrow money to cover part of the purchase.

For one thing, you might not want to tie up a large part of your cash in property. By borrowing, you can keep those funds available for emergencies or to take advantage of good investments as they appear. You are better able to spread your funds among many investments, so that you are not so dependent on the success of each one.

Finally, using leverage can improve the performance of your investment. You may not think of buying a home as an investment, but it is. First, you are investing in housing for the future. Instead of renting a home, you are renting the money to buy a home. It is true that you could lose that home if you don’t keep up the “rent” payments on the loan, but you don’t have to worry about losing your lease because the owner of the property changes plans.

Furthermore, your home can return a profit if it increase in value while you own it. Leverage will increase the rate of return you may realize on appreciation. For example, if you buy a home for $100,000, cash and sell it the next year for $110,000, your rate of return would be 10% on your investment. However, if you borrowed $80,000, to buy the home, the rate of the return on your $20,000 down payment would be 50%.

Refinancing to take out equity keeps the maximum leverage working for you. In the example above, say you sold the home at the end of the second year for $120,000. With the original $80,000 loan, the return on your equity in the second year would be 33%. If you refinanced the loan after the first year for $90,000 (taking out $10,000 in cash), your return on equity in year two would be 50%.

The other side of leverage is that it increase your risk of loss. The more you borrow, the more pressure there is on your income to cover the payments on the loan. If you run into problems, you may have trouble making your payment. Also, if the property declines in value and you must sell, leverage acts to increase your loss. For example, if the $100,000 home is sold after a year for $90,000, you would suffer a loss of 10% of your investment. If you had used a loan of $80,000, however, you would have lost half of your equity.

P.S. In any financing or refinancing decision, you should keep in mind the effect the arrangement will have on your exposure to financial trouble.

Calculating Loan-To-Value Ratio

rustantosuprih@gmail.com (mortgagebox team) — Tue, 01 Dec 2009 20:52:55 PST

The loan-to-value ratio is an important feature of mortgage loans. The ratio is calculated by dividing the amount of principal outstanding on the mortgage loan by the current value of the property mortgaged. It is a key piece of information anytime you are making financing decisions.

When you finance the purchase of the property, the loan-to-value ratio for available financing indicates how much cash you must raise to complete the purchase. For example, if the property cost $100,000 and loans are available at a loan-to-value ratio of 80%, you must raise $20,000 to make the down payment. The down payment may come from personal saving, proceeds from sale of another property, loans from friends or relatives, or a second mortgage loan.
Lenders and brokers will talk of loan terms based on the loan-to-value ratio. They’ll say a 90% loan is 8% interest plus 2 points; a 95% loan is 8 plus 2-1/2. You’ll catch on to this talk right away.

Once you have financed and purchased the property, the loan-to-value ratio tells you how much equity you have in the property. Your equity is the amount of property value you would have left over after you sold the property and paid back the loan. So, by knowing how much equity you have, you can estimate how much of the sale proceeds could be a applied to purchasing another home. Also, equity indicates how much you could raise by refinancing the property. You probably would not be able to take all of your equity out with a loan, since the lender wants to see some equity remain in the property. For example, if your home is worth $100,000 and you owe $60,000, you could raise $20,000 (less refinancing costs) by refinancing with a new loan at 80% loan-to-value.

Lenders use the loan-to-value ratio to indicate the risk of lending a mortgage loan. The higher the loan-to-value, the riskier the loan. This is because higher equity means the borrower is more financially committed to the property and is less likely to default on the loan. In addition, a high loan-to-value ratio means the property is less likely to cover the loan amount if the lender has to foreclose and sell the property.

The standard home mortgage loan is for 80% of property value. Lenders will make loans for higher ratios if they are insured or guaranteed. The Federal Housing Administration (FHA) and various private companies provide insurance for such loans, and the veterans Administration (VA) guarantees loan for qualified veterans. Mortgage insurance requires a premium to be paid by the borrower.

P.S. in addition, high loan-to-value ratio loans may carry higher rates of interest than standard loans.

Home Financing In The Global Crisis part #2

rustantosuprih@gmail.com (mortgagebox team) — Tue, 09 Dec 2008 12:37:28 PST

At the past I write about where you go to get a mortgage loan and now I continue it, is about What kind of loans you can get : In the 1980s, many different types of mortgage loans appeared, largely to cope with a high-inflation interest rate market. But these loans were basically created for the same type of borrower: those with good, established credit and enough cash to make a decent down payment. Today, almost anyone can buy a home thanks to proliferation of loans designed for different kinds of borrowers. With very good credit, you may be able to borrow 100% of the purchase price. If you have poor credit, it is likely you can still secure a loan, albeit at higher rate of interest. If you never bought a home before and do not have a credit record, there a host of loans aimed at first-time homebuyers. Most of these loans feature low down payment and relaxed underwriting standards. For example, borrowers may get credit for a history of paying their rent on time.

How your loan is processed : in the past, waiting for loan approval was a long and nerve-racking experience for most homebuyers. In recent years, much of the loan underwriting process –the procedure used to decide whether the loan should be made- has been streamlined, thanks to greater ease with which information can be accessed and transferred. Many loans are approved using computer programs that can evaluate a good deal of information pertinent to the loan. Often, the result of the process is to compute a “credit score” that determines not only whether you receive the loan, but what type of loans can be approved faster, with less hassle to the applicant. Also, fewer loans are rejected since the use of credit scores relieves the strict “go/no-go” decision.

The modern mortgage market appears to develop new products wherever there is sufficient demand. When many homeowners refinanced their mortgage as interest rates were falling, lenders began offering loans with no discount points. These loans were very popular because they reduced the cost of refinancing. Now, no-point mortgages dominate the market for purchase as well refinancing. For self-employed borrowers and other who have trouble providing the kind of information needed for loan approval, or for those who need to get approved financing quickly, there are loans that require little or no documentation. There are also loans for borrowers who make low down payments but who want to avoid the requisite mortgage insurance.

Not every lender will offer every type of loan or even the latest technology. So, today’s mortgage borrower needs to research available option and do some comparison shopping to find the best deal.

P.S. The information in this site provides a good start toward discovering the possibilities in the marketplace.

Home Financing In The Global Crisis

rustantosuprih@gmail.com (mortgagebox team) — Tue, 09 Dec 2008 12:38:53 PST

Innovation emerged in the last decade of the crisis global that are transforming the way home mortgages are made and are promising to bring even more changes in the years ahead. These changes have benefited mortgage borrowers and home buyers to a great extent, although there are some important tradeoffs. Most importantly, the borrower is a position to shop more effectively and make critical decisions based on better information. However, that borrower needs to be aware of the financing choices and sources of information available in order t get the best value.

The big trend affecting the market include:
· The use of computers and electronic communications to speed loan application.
· The development of a national market for mortgage loans and the growth of major institutions to further that development.
· The demise of inflation has reduced volatility in interest rate and encouraged lenders to extend financing to borrowers once considered too risky.

These trends are driving change in the way people finance their homes, such us:
Where you go to get a mortgage loan: during much of the last century, most people went to specialized mortgage lending institutions such as savings and loan associations (aka thrift institution) when they needed to buy a home. The government tried to nurture these institution by protecting them from competition and giving them special advantages in how they raised money and how their income was taxed. This system broke down in the 1980s when wide wings in market interest rates and high loan failure rate doomed many thrifts.

The way these lenders operated was to take in deposits from individual savers and use them to make a loans. During 1980s, a national market for loans developed and the mortgage banker –who originates and then sells the loans to investor- became the primary source of home financing. Then in the 1990s, mortgage brokers –agent who originate loans for a number of lenders- became popular because they could often find the lowest-priced financing available.
Today, being able to gather information on a number of lenders and loan products and choose from among them is well established in the market place. The Internet allows individuals to compare the term of a broad array of loans. For those who need more guidance, there are real and virtual mortgage brokers and bankers to help explain the option.

The move toward “one-stop shopping” is well under way. This concept allows a homebuyer to obtain financing and other purchase necessities in one convenient location. Many real estate brokerages have in-house mortgage operation to work with borrowers. In some cases, real estate agents can also help you select and apply for a loan without ever visiting a lender’s office.

P.S. This is first part about Home Financing In The Global Crisis, because I so tired, I will continue this part in the next post, that is what kind of loans you can get, very important to you to know about kinds of loan and how loan is processed, so don’t miss my next post… se U.

Mortgage Loan Overview

rustantosuprih@gmail.com (mortgagebox team) — Tue, 01 Dec 2009 20:54:17 PST

The vast majority of homes are purchased with mortgage loans. when you borrow on a home, you are committing yourself to two financial documents. The note is a personal obligation to repay the loan on a timely basis. the mortgage pledges the home as security in case you fail to live up to your obligation. This document sets out the obligation you are expected to meet and defines your rights and those of the leader.

All mortgage pledges have an interest rate in applied to the amount of money you borrowed and haven’t yet paid back. You pay this interest in monthly installments. In addition to interest, your payment includes an extra amount to pay back the principal. Therefore, the principal balance is reduced with each payment. This means that the interest payment is also reduced, as time passes.

Since the total payment remains constant, more money is applied to principal reduction as the loan ages. The payment schedule is designed so that the loan will be completely paid off at the end of the term even though few mortgage loans survive their full term. Most are ended when the home is sold or refinanced several years after the loan was originated.
Definition of a few key terms are provided below to help you better understand mortgage financing. ( A more extensive glossary begins on other post)

Amortization is the process of paying down the principal of the loan. If the interest rate on the loan is fixed, an amortizing schedule for the full term can be prepared when the loan is originated.

Fixed-rate loan have the same interest rate applied over the entire term. The combined monthly payment for principal and interest is unchanged.

Adjustable-rate mortgages (ARMs) provided for adjustment to he interest rare at specified intervals. When the rate is adjusted, the principal and interest payment may change.

A balloon payment occurs when the term of the loan is shorter than the full amortization term. Most balloon payment loans are made by nonprofessional lenders, such as seller who provide financing to induce a sale. They want to limit the life of the loan without making monthly payments prohibitively high. When a balloon payment becomes due, the borrower will have to refinance the loan.

Refinancing is the process of replacing the current financing with a new loan or set of loans. This may involve replacing the original loan with one of the same amount, increasing the amount of the loan, or replacing several mortgages with one mortgage loan.

Loan assumption is the process of allowing a later home buyer to take over the existing loan, possibly substituting for the seller. Many loans have due-on-sale provisions that prevent assumptions. Loans that don’t are called assumable mortgages.

An escrow account is required by most lenders. The account provides fund to pay for hazard insurance and property taxes, the borrower makes a deposit in the account with each monthly payment (the total payment is sometimes called PITI, for principal, interest, taxes, and insurance). Since insurance premiums and taxes may vary, the monthly payment may change over time even for fixed rated loans.

A loan commitment indicates the lender’s intention to provide a loan with a specified terms. The lenders has to process the loan application before the loan is approved, but a rate commitment may by granted when you apply. This state that, if the loan is approved, it will be for a certain amount and have certain terms.

A loan closing, also called settlement, marks the time when the money is provided (usually coinciding with the closing of the sale) and interest starts to accrue. Payments are often timed to be paid at the beginning of the month and include interest that has accrued during the previous month. Interest accruing between the closing and the end of the month is paid at the closing.