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You signed your final documents and the keys to your new home are in your hand. And you just parted with a ton of money. So, you ask, when is my first mortgage payment due?
- The amount of time you have before your first payment depends on the day of the month you close your mortgage
- Add one month to your closing date, then your first payment is due on the first of the following month
- The earlier in the month you close, the more time before your first payment
However, when you close, you pre-pay the interest for the rest of the month. So your closing costs are higher.
When is my first mortgage payment due?
Closing on a home can feel great. All the paperwork has been taken care of. Now you’re eager to start moving into your home and making it your own. But a question is on your mind: When is my first mortgage payment due?
It’s smart to know what to expect with your first mortgage payment. The due date might be right around the corner. Or not. Learning the facts can ease your mind and prevent a late payment.
The first comes first
Ray Brousseau, president of Carrington Mortgage Services, says there’s a simple rule when it comes to the first mortgage payment.
“Typically, your first mortgage payment is due on the first of the following month after 30 days have passed,” he says. “Say, for example, your mortgage closes on June 22. Then your first payment would be due on August 1.”
Jeffrey Hensel with North Coast Financial says most lenders set their payment due date for the first of the month. You can expect this first-of-the-month deadline every month until your mortgage is paid off.
Grace (period) under pressure
Yet this first-of-the-month deadline has some flexibility built in.
“You have a 15-day grace period in which to pay that month’s mortgage payment,” says Hensel. “Assume your payment is due August 1. It would be considered late if it arrived from you on August 16.”
Do you expect your payment to be more than 15 days late? Notify your lender and explain why. If you don’t, they may assess a late payment fee. This can amount to 3 to 6 percent of the amount due. Say you have a $900 monthly mortgage payment. A 5 percent late fee would be $45.
Paying late can also lower your credit score. That’s because your lender may also report your lateness to the three major credit bureaus that determine your score.
The 411 on mortgage financing
It’s important to know what to expect before paying your first mortgage bill.
Brousseau says your lender should provide you with information shortly after closing.
“That information should include the amount of the payment and the due date. It should also indicate the location to send the payment to and any payment options,” says Brousseau.
“Most lenders provide borrowers with a coupon book. This also tells you when each payment is due and the specific amount,” says Hensel.
On a fixed-rate mortgage, your principal and interest payments should be the same every month.
“Your loan may require an escrow account to pay property taxes and insurance. If so, expect that portion of your payment to vary slightly from month to month. This will depend on any changes to your property taxes or insurance amounts due,” adds Brousseau.
Pick your payment preference
There are different ways to pay your mortgage. The easiest method is autopay. This will ensure that your mortgage payments always arrive on time. (Make sure you have enough funds in your bank account, of course.)
Autopay involves either:
- allowing your lender to make automatic withdrawals from your bank
- having your bank mail a check automatically to the lender each month
Some mortgage programs actually offer a discount in the fees if you agree to set up an autopay. It reduces the risk to the lender that you will miss your payment.
A second option is to mail a check to your lender. Give yourself a little leeway and put it in the mail at least five business days before the first of the month. Check to see that the funds have cleared within your grace period. The risk here is that the payment could get lost or delayed in the mail.
A third option is to make an online payment to the lender. You may be able to do this through the app or website of your bank or mortgage lender.
A fourth choice is to call the lender. Provide your credit card information to make a phone payment. You may be able to do this via a live customer service representative or an automated option.
“Note that some payment options may carry an extra charge,” Brousseau notes. “Also, find out how long the processing time is with your payment option. If the payment takes too long to process, it may arrive late.”
Pay more to pay off early
Note that most people make 12 monthly mortgage payments a year. But others pay more than 12. This allows them to pay off their loan early, says Bruce Ailion, Realtor and real estate attorney.
“A popular method is making a 13th payment toward your principal once a year,” Ailion says. “With this approach, you choose a month when you have extra funds. Then, you make two payments that month. You would make your normal payment on the first. But you’d make an extra full payment on the 15th of the same month.”
Ailion suggests checking with your lender first.
“You want to make sure your extra payment is credited properly,” he says. “Also, not all lenders will permit this method of payment.”