Interest from the day of closing to the first day of the following month. To simplify the task of loan administration, the accounting for all home loans begins as if the loan was closed on the first day of the month following the day the loan is closed. For example, if the loan is closed and the money disbursed on May 15, the clock begins ticking on that loan as if it were closed on June 1, with the first payment due July 1. But since the lender actually gave you the money on May 15, the lender expects to be paid interest for the period between May 15 and June 1. That payment is the 'per diem interest,' which is due at closing. If the loan in the example above was $100,000 and the interest rate 6%, the per diem interest would be $100,000 x .06/365 x 17, or $279. In some cases, especially when a loan is closed early in the month, the lender is willing to rebate interest to the borrower for those few days and collect the first payment a month earlier. If the loan above was closed May 3, for example, the lender would pay three days of interest at closing and collect the first monthly payment on June 1.
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Every person working in real estate or planning to buy or sell real estate can benefit by using our free real estate dictionary. This dictionary of real estate terms is the most extensive in the industry and is used by many *real estate agents, real estate brokers, mortgage brokers, Realtors *and instructors in major real estate schools across the country and the world.
Keller Wiiliams Realty Partners SW
Mobile: 954-702-6347 Office: 954-237-0400Send Email Website Agent Listings Driving Directions
" Love what you do, and never work a day in your life... Roseline began her career in the Banking and Mortgage industry while in college, where she graduated with an accounting degree. She discovered her passion for Real Estate while working in the M" ... view more
The Keyes Company
Mobile: 1-954-410-9358Send Email Website Agent Listings Driving Directions
" Whether a first-time buyer, seasoned homeowner, or multi-property investor, the team at The Keyes Company is your go-to resource for all things real estate. Family-owned and in business since 1926, The Keyes Company has grown across the state of Florida. We have captured accolades such as bein" ... view more
"ED RANGEL - REALTOR ASSOCIATE - AT NINETEEN(19) YEARS OF AGE, ED RANGEL WAS A PROFESSIONAL FRAMER AND DRY-WALLER,LATER ON TO BECOME LICENSED IN THE STATE OF CONNECTICUT AS SUCH. WITH AN EARLY START IN THE REAL ESTATE WORLD,AT THE AGE OF TWENTY ONE(21), AS AN INVESTOR, A LITTLE OVER FOURTEEN " ... view more
First Colonial Realty
Assistant (Anna) 954-744-9732
" Raised in South Florida, and a graduate of Barry University with a masters degree in business management, Diana knows the area and its schools. Diana is dedicated to helping her clients identify and the best neighborhood and home for them. Are you looking for an " ... view more