How to Make Your First Mortgage Payment

Embarking on the path of homeownership marks a significant personal and financial milestone. Understanding the mechanics of your first mortgage payment becomes a practical necessity. Familiarizing yourself with its details ensures a smooth transition into this new phase of your financial life.

Locating Your Mortgage Servicer and Account Information

After closing, identifying your mortgage servicer and gathering account details is an important first step. While your original lender facilitated the loan, the mortgage servicer typically handles monthly payment collection. You can expect to receive a “welcome packet” or “notice of servicing transfer” from this servicer in the weeks following closing.

These documents will contain the servicer’s name, your mortgage account number, and the due date for your first payment. Your first payment is generally not due immediately after closing. Mortgage payments are typically made in arrears, meaning you pay for the previous month’s interest and principal. Consequently, your first payment is usually due on the first day of the month, one full month after closing, and must be made within 60 days.

Submitting Your First Payment

Once you have identified your mortgage servicer and retrieved account information, several methods are available for submitting your first payment. Online portals are a common and convenient option, allowing you to create an account on the servicer’s website, link your bank account, and schedule payments. This digital approach often provides a confirmation number, offering immediate proof of transaction.

Alternatively, you can send payment through the mail using a personal check or money order. When mailing payment, ensure your mortgage account number is clearly written on the check or money order. Allow sufficient mailing time, typically at least seven business days, to guarantee payment arrives by the due date.

Paying by phone is also an option, where you provide bank account and routing numbers to a customer service representative; some servicers may charge a fee. Following your initial payment, most servicers offer recurring automatic payments, which can help ensure future payments are made on time.

Components of Your Monthly Mortgage Payment

Your monthly mortgage payment typically encompasses four main components, known as PITI: Principal, Interest, Taxes, and Insurance. Principal directly reduces the outstanding loan balance, gradually decreasing the amount owed. Interest represents the cost of borrowing, calculated as a percentage of your remaining principal balance.

Property taxes, collected by the servicer, are forwarded to the local government for public services. Homeowner’s insurance premiums, also collected by the servicer, provide coverage for potential property damage.

For many homeowners, funds for property taxes and insurance are collected by the mortgage servicer and held in an “escrow account.” The servicer then uses these funds to pay tax and insurance bills on your behalf as they come due, simplifying the management of these large, infrequent expenses.