Most people make their mortgage payments on the first of the month or a few days before the actual due date. But what about the first payment on a new mortgage loan? Let’s walk through some important details on that initial payment and see how your closing date coincides with when your lender will expect your first payment.
When Is Your First Payment Due After Closing?
When it comes to first mortgage payments after closing, the exact due date will depend on the type of loan you have taken out and when you completed your closing. Generally speaking, however, your first mortgage payment is due one full month after your closing date.
For example, if your closing takes place on October 15th, your first mortgage payment is typically due December 1st. This means that you’ll have gone two full months without making a payment, which explains why your lender will require that you make the first payment at closing and then make another lump sum payment one month later.
No matter what type of loan you have taken out, your lender should clearly outline your payment schedule during the closing process. If you’re ever unsure about when a specific payment is due, always be sure to consult with your lender so that you can avoid any late fees or other penalties.
How Much Is Your First Mortgage Payment?
How much your first mortgage payment will be also depends on a number of factors, including the type of loan you have taken out, the amount borrowed, and your interest rate. Generally speaking, your first mortgage payment will include a lump sum for principal and interest that’s based on the loan balance at closing. This could be the same amount as your regular monthly payment, or it could be slightly higher depending on the particulars of your loan.
It’s also important to remember that any taxes and insurance premiums that may have been collected at closing will likely not be included in this first payment.
Factors That Might Affect Your First Mortgage Payment
Your first payment will generally be on the first day of the month following your first 30 days of ownership, but when you close can affect how much time you have between closing and that payment. While you can’t change your payment due date, you can always pay your mortgage early.
The Time Of The Month When You Close
The time of the month when you close affects how much time will pass between closing on your loan and the due date of your first payment. As we mentioned, if you close on October 15th, your first payment may not be due until December 1st.
Though this doesn’t necessarily mean you’re skipping a payment. You’ll prepay the interest for October 15 – October 31 when you close. This means that planning your closing date at the beginning of the month means you must bring more money to the closing table. However, it gives you more time between closing and when you’ll make your first mortgage payment.
Paying Early
Most banks make mortgage payments due on the first of the month. Some lenders have built in flexibility, but if you don’t have that option, paying your mortgage early each month, or bi-weekly, can help you build in some flexibility.
For instance, if you can pay your mortgage 3 – 7 days earlier each month, you’ll be a month ahead on your payments within 4 – 8 months. Better yet, ask your lender if they allow bi-weekly payments. You’ll pay ½ your monthly mortgage payment every two weeks. This means you’ll make 13 full payments each year, ultimately paying much less interest and you’ll shorten your loan term.
Keep in mind that some mortgage companies may charge you a fee if you pay your full loan amount ahead of schedule.
How To Make Your First Mortgage Payment
Making your first mortgage payment is easier than you may think. The key to making sure you get it right the first time is understanding the steps involved and knowing when it is due.
To begin, make sure that you have all the necessary information about your loan agreement. This should include a breakdown of all closing costs as well as your current principal balance and interest rate. Then, contact your lender to find out when your first payment is due.
Once you have determined the date that your payment is due, you will need to decide how you want to make the payment. If you plan on making the payment by check or money order, be sure to fill in all the required information. You can also make your payment through an online bill pay service or set up a direct debit from your bank or credit union account.
No matter what method you choose to make your first mortgage payment, make sure that you get it in on time. If you are having trouble making the payment due to a financial hardship, it’s important that you contact your lender right away. Many lenders are willing to work with borrowers who are struggling financially, so don’t wait until it’s too late.
What Happens If You Miss A Payment?
Missing a mortgage payment on the first of the month can have serious consequences that can lead to foreclosure or other detrimental financial circumstances. When a borrower misses a payment, the lender will charge late fees, which can amount to significant amounts over time and create more financial stress for the borrower. Most mortgage lenders offer a grace period of around 2 weeks before charging a late fee, but it is still important to stay on top of your payments. Additionally, missed payments will also be reported to credit bureaus and negatively affect the borrower's credit score.
The best way to avoid these issues is to make sure that you are aware of when your payment is due and plan ahead so that you can make it on time. Many homeowners find it is easiest to set up automatic payments that way they don't have to worry about being on time. If you find yourself in a tough spot, contact your lender right away and explain the situation – they may be able to work with you to create a payment plan or other solution that better suits your needs.
Conclusion
Making your first mortgage payment is a huge milestone in homeownership and something you should be proud of, not stressed about. When it comes to mortgage payments, understanding when your first one is due and how much it will cost is an important step in the process. Knowing your payment schedule and when each payment is due will help you budget accordingly so that you can make your payments on time and take full advantage of the benefits of homeownership. Good luck!
