When Do I Make My First Mortgage Payment?
New homeowners: Clarify when your first mortgage payment is due. Unravel the timing, what it includes, and where to find your exact details.
Navigating homeownership involves understanding your mortgage, particularly the first payment. Many new homeowners find the timing unclear. This guide clarifies when and how your first mortgage payment is typically structured.
The Typical First Payment Timeline
Your first mortgage payment is not due immediately after you close on your home. Instead, it is scheduled for the first day of the second full month after closing. This usually means a period of 30 to 60 days, or longer, between closing and your first payment.
For example, if you close on your home on January 15th, your first payment would be due on March 1st. This delay provides a brief window before regular monthly payments begin.
This extended period before the first payment is a common industry practice and not an indication that you are “skipping” a payment. The timing is a direct result of how mortgage interest is calculated and collected. It is important to understand this timeline to budget appropriately.
Understanding Interest Accrual and Your Closing Date
Mortgage interest operates on an “in arrears” basis, meaning the interest you pay covers the preceding period, not the current one. Interest begins accruing daily from your closing date. This daily accrual explains why the closing date significantly impacts your initial financial obligations.
At closing, you pay “prepaid interest” covering the period from your closing date through the end of that month. For instance, if you close on January 15th, you pay interest for January 15th through January 31st as part of your closing costs. This upfront payment compensates the lender for interest during the partial month you owned the home.
Because this partial month’s interest is paid at closing, your first full mortgage payment covers interest for the first full calendar month the loan is in effect. Using the January 15th closing example, your first payment due on March 1st covers interest accrued during February. This mechanism explains why your first full payment is often due on the first day of the second month after closing.
Components of Your Initial Mortgage Payment
Your first regular mortgage payment comprises four main components, often called PITI: Principal, Interest, Taxes, and Insurance. This structure consolidates various housing costs into a single monthly sum. Understanding each part is essential for comprehending your overall payment.
The principal portion directly reduces the outstanding loan balance. While a smaller part of early payments, this component gradually increases over the loan’s term. The interest component covers the cost of borrowing for the preceding full month, distinct from prepaid interest paid at closing.
The remaining components, taxes and insurance, are often collected by the loan servicer and held in an escrow account. Property taxes are assessed by local authorities and contribute to public services. Homeowner’s insurance protects your property against covered perils, and if your down payment was less than 20%, private mortgage insurance (PMI) may also be included to protect the lender.
Locating Your Official Payment Information
To confirm the exact due date and amount of your first mortgage payment, consult your Closing Disclosure (CD). This five-page form, which you receive at least three business days before closing, contains the finalized loan details. Review the “Projected Payments” table and “Cash to Close” section on the CD for a clear breakdown.
The Closing Disclosure outlines your loan terms, monthly payment schedule, and all associated fees and costs. It provides a comprehensive overview of your financial obligations. Comparing your Closing Disclosure with the initial Loan Estimate can help identify discrepancies.
Beyond the Closing Disclosure, your loan servicer is another source of information. After your loan closes, the servicer typically sends a welcome packet with details about your payment schedule, payment methods (such as online portals or coupons), and contact information. If you have questions or need clarification, contact your servicer directly.