When Does Your First Mortgage Payment Start?

Securing a mortgage is a significant step in homeownership, and new homeowners often wonder when their first mortgage payment is due. The timing of this initial payment is not immediate, as it is influenced by factors during the loan closing process. Understanding these details helps borrowers prepare financially and avoid surprises.

Understanding Prepaid Interest and Closing

Mortgage payments operate on an “arrears” system, meaning each payment covers the interest accrued from the previous month. For instance, a payment made on October 1st covers the interest that accumulated during September. This structure necessitates a specific financial adjustment at closing, known as prepaid interest. Prepaid interest covers the period from your loan closing date through the end of that current calendar month.

This interest is collected at closing because your first full mortgage payment is not due the month immediately following your closing. Instead, your first payment covers interest for the next full month after closing. For example, if you close on June 15th, prepaid interest covers June 15th through June 30th. Your first full payment, due on August 1st, would then cover interest for all of July. The amount of prepaid interest varies based on your closing date, with earlier closing dates requiring more prepaid interest.

Calculating Your First Payment Due Date

The specific due date for your first mortgage payment is directly tied to your closing date and the standard mortgage payment cycle. Mortgage payments are generally due on the first day of each month. The first payment is typically due on the first day of the second month following your closing. This provides a period of approximately 30 to 60 days before your first payment is required.

For example, if you close on your mortgage early in the month, such as June 5th, you will pay prepaid interest for the remainder of June at closing. Your first mortgage payment would then be due on August 1st, covering the interest for July. If closing occurs later in the month, such as June 25th, you would pay prepaid interest for the few remaining days of June. In this scenario, your first mortgage payment would still be due on August 1st, covering the interest for July.

Receiving Your First Statement and Setting Up Payments

After your mortgage closes, you will receive important communications from your mortgage servicer. Typically, your first mortgage statement is mailed within 30 days of your closing date. This statement will confirm your first payment amount, the exact due date, and details about your mortgage servicer. Review these documents carefully to ensure all information is accurate and matches your expectations from closing.

Once you receive your statement, you can set up your first payment. Most servicers offer multiple convenient payment options, including online portals, automatic payments (auto-pay) directly from your bank account, or payment by mail. Setting up auto-pay helps ensure payments are made on time, avoiding potential late fees. Confirm if your servicer has a specific preferred method for initial payments or if there are any fees associated with certain payment channels.