Whether you’re buying your first rental or refinancing your primary residence, you’re bound to get your fair share of advice. Even here, after all you’re reading this article right? The advice you receive will always be well-meaning but unless you’re an expert in any of the fields related to real estate youclosing on the last day of the month won’t truly know if the advice you get is true or not.

Some advice you can trust, like those from professional investors, loan officers and others who work in the field of real estate. Sometimes the advice is a myth, something that’s been passed around for years. For instance, “Don’t refinance until rates are 2.00% below your current rate, it’s not worth the cost.” Sound good? It can be but the rate really has less impact than you think because there are so many other factors involved.

Okay, here’s another one. “It’s always best to close on the last day of the month.” Have you heard that one? If not, you will someday. I’m not sure exactly where that came from and at first glance it makes sense to some degree. When you close on a purchase your new lender will collect prepaid interest from you up to the first of the following month. If you close on the last day of the month the lender will collect just one day of interest. That saves you a little bit of cash. But just the opposite is true as it relates to a refinance. When refinancing your goal is typically to get the lowest rate possible and the longer you wait the more you will pay in interest charges, so the sooner you close the better.

Oh, and that closing on the last day of the month thing? What, on the 31st of the month, you go to the settlement and the numbers aren’t right. Or your name is misspelled (it happens) or the bank gave you a 15 year loan and you wanted a 25 year note? In the case of any changes, your loan papers must be sent back to the lender who will make the changes and quite possibly get your papers back to your closing. If not, you could slip into next month and your lender now collects nearly a full month of prepaid interest. Closing on the last day doesn’t provide you any “Plan B” should things not work out quite right.