How Long After Closing Do Mortgage Payments Start?

For many new homeowners, a common question arises after the excitement of closing on a new house: when does the first mortgage payment begin? Understanding the exact timing of this initial payment is important for financial planning and avoiding unexpected stress. This article aims to clarify the typical schedule for mortgage payments after closing, helping new homeowners prepare for this significant financial responsibility.

The Typical First Payment Schedule

The first mortgage payment is generally not due immediately after closing; instead, it typically falls on the first day of the second full month following your closing date. For instance, if you close on your home in mid-August, your first mortgage payment would likely be due on October 1st. This structure means there is usually a period of 30 to 60 days between your closing date and your initial payment.

This common timeline exists because mortgage payments are paid “in arrears,” meaning each payment covers the interest accrued during the previous month, not the current one. For example, a payment made on October 1st would cover the interest for the month of September. The interest for the partial month of closing is handled separately.

Understanding Mortgage Interest and Closing Costs

The concept of “per diem interest,” also known as pre-paid interest, is typically collected at closing. This interest covers the period from your closing date through the last day of the month in which you closed. For example, if you close on June 15th, you will pay interest for June 15th through June 30th at closing.

This payment ensures the lender is compensated for the interest from the moment loan funds are disbursed until the regular monthly billing cycle begins. Because this partial month’s interest is paid upfront, your first regular mortgage payment is then deferred to cover the interest for the first full month following your closing month. For instance, after paying per diem interest for June, your first payment on August 1st would cover the interest for the entire month of July.

Locating Your Specific First Payment Details

To determine the precise due date and amount of your first mortgage payment, you should consult your official loan documents. The Closing Disclosure (CD) is a five-page document provided to you at least three business days before closing, detailing the final terms of your mortgage loan and all closing costs. This document includes your projected payment schedule and the total cash needed at closing.

Another important document is the Promissory Note, which is your legal promise to repay the loan and outlines the specific terms, including the loan amount, interest rate, and payment schedule. Your mortgage servicer will also send a welcome letter or provide access to an online portal with instructions for your first payment. It is important to review these documents thoroughly and contact your lender or servicer if you have any questions.

Preparing for Your First Mortgage Payment

Once you have identified your first payment due date and amount, preparation is important. Consider setting up automatic debits from your bank account to ensure timely payments and avoid late fees, which can negatively impact your credit. Most servicers offer online payment portals, but options for mailing checks are also typically available.

It is also beneficial to understand the components of your monthly mortgage payment, which typically include principal, interest, and often an escrow amount for property taxes and homeowners insurance. Your billing statement will provide a breakdown of these amounts. Establishing a budget that incorporates your mortgage payment and other homeownership expenses well in advance can help ensure a smooth financial transition into your new home.