When Do I Make My First Mortgage Payment?

For many new homeowners, understanding the precise timing of their initial mortgage payment is important for financial planning. This article aims to demystify the typical timeline for your first mortgage payment and provide guidance on how to prepare for it.

Standard Timing of Your First Mortgage Payment

The first mortgage payment is generally due on the first day of the second month following your closing date. For instance, if you close in June, your first mortgage payment is typically due on August 1st. This creates a significant gap between closing and the first payment due date, often 30 to 60 days. The specific day of the month you close influences the length of this gap.

If you close early in a month, such as June 5th, your first payment is still due August 1st, providing a longer period. Closing later, like June 28th, still results in an August 1st due date, creating a shorter interval. This consistent due date structure, regardless of the exact closing day, is common practice. Mortgage payments cover interest that has accrued in the previous month, a concept known as paying in arrears.

Understanding Prepaid Interest

The delay in your first mortgage payment relates to prepaid, or per diem, interest. Prepaid interest is the daily interest that accrues on your mortgage loan from the closing date up to the end of that month. This amount is collected at closing because mortgage interest is paid in arrears, meaning your payment covers interest already accumulated. Therefore, interest for the partial closing month is settled upfront.

For example, if you close on June 15th, you will pay prepaid interest covering June 15th through June 30th at closing. This ensures the lender receives interest for every day the loan is outstanding. Your first full mortgage payment, due on August 1st in this scenario, then covers the interest accrued during July, along with a portion of the principal. This mechanism bridges the gap between your closing date and your first regular payment, ensuring continuous interest coverage for the lender.

Making Your First Payment

After your loan closes, your mortgage servicer typically sends a welcome package or first statement, by mail or digitally. This communication contains essential information, including your first payment due date, the total amount due, and a breakdown of what that payment covers, such as principal, interest, property taxes, and insurance. Carefully review these documents to confirm your specific payment schedule and avoid misunderstandings.

Common methods for making your first mortgage payment include using the lender’s online payment portal, setting up automatic payments from your bank account, or mailing a check. Some servicers also accept phone payments. Explore available payment options and select the method that best suits your financial routine. Always confirm that your payment has been successfully received and processed by your servicer to ensure your account remains in good standing.