I suspect you are missing something, however, I am struggling to follow your post.

When looking at installment loans, the only thing that matters is interest. Interest is what the bank is charging you for using their money. The rest is you converting the bank's note into your equity.

If you want math I will need the loan amount and the rate. However, I believe you are looking at payments rather than cost. Essentially the bank charges you a daily interest rate every day you use their money. If you go a longer period without making a payment they just charge you interest on that period.

In your example you are moving the payment back 31 days, but only moving the closing back 7 days. Those additional 26 days where you own the property are being charged interest. In addition to being charged $500 interest you are going to have to pay one month later. Essentially you will always be a month behind on payments by paying $500 to move the payment for a month. So your total cost will always be $500 more (assuming you pay the loan off over term).

Having said all this, I would still pay the $500 and delay a month. Because, why not.

bry is right.

Once you close, you are paying interest per day, collected monthly, until the mortgage loan is paid in full. The only exception to collecting monthly is when you buy and when you sell then the interest is pro-rated to the day of closing :)

I have found that many buyers either forget or don't know that the mortgage payment that is due the first of each month pays the interest for the previous month plus a bit of principal. Many people assume they are paying forward for the month when they are actually paying in arrears.

If you choose to close 11/26 the interest for 11/26 through 11/30 will be collected at closing as pre-paid interest and show as a line item on your closing statement. It is true that if you choose to close 11/26 then the mortgage payment will be due Jan 1, 2019. This is SOP.

If you choose to close 12/3, then the lender will collect the pre-paid interest for the mortgage loan from 12/3 through 12/31 at closing. You will see the line item on your closing statement and the first mortgage payment will be due 2/1/19.

In either event, you are pre-paying the interest due from the closing date to the end of the month.

Agree with bry911, if you can get the seller to agree then delay your closing to 12/3 even though the closing costs will be slightly higher due to the longer daily interest period collected at closing.

If you are in the US, then closing the week of Thanksgiving can be a little difficult due to title company personnel and lender personnel taking time off. So pick your date accordingly.

Now that is an agent that is thinking ahead for you :)

You pay it now or you pay it in the later years of the mortgage.

Your calculations may be correct (I did not check carefully), but rrah makes the most important point - your total cost savings is often minimal. We all want to pay as little as possible up front, but for most valid closings costs, if you don't pay it up front you will then pay it later.

The one exception is when you delay closing by a few days, because you won't pay interest for those days if you don't have a loan yet. However, moving the closing a little so that it delays the first payment means you still pay interest for those days because you do have a loan and interest is accruing. It should also increase your monthly payment because they usually take the interest for the month you skipped and spread it out over the rest of the year.

Bruce

thanks for all the comments! this has been a learning process indeed. i ended up closing on 11/16. once i got final approval on my loan and the house appraised out etc...i got excited about moving in as soon as i could. the seller had moved out in october so didn’t mind closing early. and this way i don’t have to pay rent for december!