text: 2 words...prepaid interest. it is best to close your loan at the end of the month. you will pay less interest and you will still get a month or so off from your next mortgage payment. If your original loan payment is around the first of the month try to close your loan by the 25th or so that way you wont have to pay your next month's payment, and by the time the new lender mails you a statement, it wont be scheduled to pay until the next month.