When Is a First Mortgage Payment Due?

A mortgage payment is a regular financial obligation for homeowners. Understanding the timing and specifics of this payment, especially the very first one, is important for new homeowners. This initial payment has unique considerations. Knowing its structure helps manage finances effectively.

Understanding Your First Payment Due Date

The due date for your first mortgage payment commonly falls on the first day of the second full month after your mortgage loan closes. This timing is a result of how mortgage interest accrues and is collected. Interest begins accumulating from the day your loan closes.

Mortgage payments are paid in arrears, meaning the payment you make covers the interest from the previous month. Since your first full mortgage payment is due on the first of a month, but your closing date can be any day, lenders collect what is known as “per diem interest” at closing. This per diem interest covers the daily interest accrued from your closing date through the end of that same month. For example, if you close on March 15th, you would pay per diem interest for March 15th through March 31st at closing. Your first full payment would then be due on May 1st, covering the interest for the entire month of April.

The specific closing date within a month significantly influences how much per diem interest is due at closing and how long you have before your first full payment. Closing earlier in the month means more per diem interest is collected at closing, but provides a longer gap before the first full payment. Conversely, closing later in the month reduces the per diem interest owed at closing, but shortens the time until your first payment is due. You can find your official first payment due date in your closing disclosure, promissory note, or lender’s welcome packet.

Components of Your First Mortgage Payment

A mortgage payment consists of four primary components: Principal, Interest, Taxes, and Insurance, often referred to by the acronym PITI. The principal portion reduces the outstanding loan balance, while interest is the cost of borrowing. Taxes refer to property taxes, and insurance includes homeowners insurance and, if applicable, private mortgage insurance (PMI).

For your first mortgage payment, the principal and interest breakdown is part of the loan’s amortization schedule. In the early years of a mortgage, a larger portion of each payment is allocated to interest, with a smaller amount going towards the principal balance. This allocation gradually shifts over the loan’s term, with more of the payment eventually going towards principal repayment.

Property taxes and homeowners insurance are managed through an escrow account. Your lender establishes this account to collect a portion of these annual expenses with each monthly mortgage payment. Funds are held in escrow and disbursed by the lender when tax and insurance bills become due. Initial contributions to this escrow account are collected at closing to ensure funds are available for the first payments. Your first official mortgage statement will provide a detailed breakdown of these components and the exact amount due.

How to Make Your First Payment

Several convenient methods exist for making your mortgage payment. Many loan servicers offer online portals where you can securely submit payments from your bank account. Setting up automatic drafts from a checking or savings account is another common and reliable option, ensuring payments are made on time each month. Payments can also be made by mail with a check or by phone.

Making your payment on time is important to maintain a positive financial standing. Most lenders provide a grace period, around 15 days, after the due date during which a payment can be made without incurring a late fee. However, if a payment is 30 days or more past due, the delinquency is reported to credit bureaus, which can negatively impact your credit score. Late fees, ranging from 3% to 6% of the overdue payment, are also assessed once the grace period expires.

Consistent communication with your loan servicer is beneficial if you anticipate any difficulty in making a payment. They can provide specific instructions for payment methods, confirm due dates, and discuss potential options if financial challenges arise. Addressing payment concerns proactively helps avoid late fees and negative credit reporting.