If I Close at the End of the Month When Is My First Payment Due?

Understanding the timing of your first mortgage payment is a common point of confusion for new homeowners, especially when the closing date falls near the end of a month. Many buyers anticipate a payment immediately after closing, leading to questions about the precise due date. This article aims to demystify how these dates are determined, providing a clear understanding for effective financial planning in your new home.

The Standard Mortgage Payment Schedule

Mortgage payments are structured to be made in arrears, meaning each payment covers interest accrued during the previous month. For instance, a payment made on May 1st covers interest incurred throughout April. This system contrasts with rent payments, which are paid in advance for the upcoming month.

Payments are due on the first day of each month. A mortgage payment encompasses four main components, referred to as PITI: Principal, Interest, Taxes, and Insurance. While the principal portion reduces the loan balance and the tax and insurance amounts are held in an escrow account, the interest component is directly tied to the preceding month’s accrual.

The Role of Your Closing Date

Your mortgage closing date directly influences your first payment due date because of “prepaid interest,” also called “per diem interest.” This amount covers interest that accrues from the closing date up to the last day of that current calendar month. For example, if you close on January 25th, you pay interest for January 25th through January 31st at closing.

This prepaid interest ensures your loan’s interest is current through the end of the closing month. By settling this initial interest upfront, the lender allows the standard “payment in arrears” schedule to begin. Because you have already paid interest for the remainder of the closing month, your lender “skips” the next full calendar month’s payment. This provides a buffer period before your regular monthly payments begin.

Determining Your First Payment Due Date

The general guideline for your first mortgage payment is that it is almost always due on the first day of the second full month after your closing date. This timing results directly from the prepaid interest paid at closing. You essentially pay interest for the partial month of closing, and then a full calendar month passes without a payment being due, before your first regular payment.

For example, if you close on January 28th, you would pay prepaid interest for the remaining days of January (January 28-31) at closing. The following month, February, would be skipped, and your first full mortgage payment would then be due on March 1st. This March 1st payment would cover the interest that accrued during the entire month of February. This structure provides a period of financial adjustment for new homeowners, allowing time to settle into their new residence before the first major mortgage obligation.

Confirming Your Payment Information

To verify the exact date and amount of your first mortgage payment, consult your official loan documents. The Closing Disclosure (CD) is a five-page form providing final details about your mortgage loan, including loan terms, projected monthly payments, and all associated fees and costs. Lenders must provide this document at least three business days before your scheduled closing date for review.

Another document for your first payment due date and loan details is the promissory note. This legal document outlines your promise to repay the loan, specifying the interest rate, payment schedule, and principal amount financed. If questions arise after closing, contact your loan servicer—the company collecting your monthly payments. Knowing the precise due date helps avoid late fees or negative impacts on your credit history.