When Is the First Mortgage Due After Closing?
Understand your first mortgage payment after closing. Get clear insights on its due date and how to prepare for this financial step.
Understanding when your first mortgage payment is due after closing on a new home is a common concern. Knowing this timeline is important for effective financial planning and budgeting for initial expenses and monthly obligations.
Typical First Payment Timeline
The first mortgage payment is typically due on the first day of the month following a full month after your loan closes. For example, if you close in mid-January, your first payment would be due on March 1st.
Mortgage payments are made in arrears, meaning each payment covers the interest accrued during the previous month. This arrangement creates a brief period after closing where no payment is immediately due, giving homeowners time to settle in. However, interest begins accruing on your loan from the day of closing.
Factors Influencing the First Due Date
Several factors influence the precise date and amount of your initial mortgage payment. The specific day your loan closes plays a significant role. Closing earlier in the month often means a longer period before the first payment is due, as more per diem interest is collected upfront.
Per diem interest, or daily interest, is calculated from your closing date to the end of that month. This amount is typically paid as part of your closing costs, covering the interest for the partial month you own the home. This ensures that when your first full mortgage payment is made, it covers the interest for the preceding full month.
Most lenders set mortgage payments to be due on the first day of the month, regardless of your specific closing date.
Locating Your Specific Payment Information
To find the exact due date and amount for your first mortgage payment, several documents and communications provide this information. The Closing Disclosure (CD) is a five-page form provided by your lender at least three business days before closing. This document outlines the loan terms, projected monthly payments, and the specific date your first payment is due.
Another legal document signed at closing is the Promissory Note, which details the loan terms, repayment schedule, and where payments should be sent.
Shortly after closing, your mortgage servicer will typically send a welcome packet or initial statements. These communications confirm your first payment details and often include instructions for setting up an online account where the due date and payment amount will be displayed.
Submitting Your Initial Mortgage Payment
Once you have identified your specific payment information, there are several common methods for submitting your initial mortgage payment. Many servicers offer online portals where you can make a one-time payment after setting up an account. Other options typically include mailing a check or making a payment over the phone.
Setting up recurring payments, such as auto-pay, is a convenient way to ensure future payments are made on time. It is often advisable to make the first payment manually to confirm all details before activating automatic withdrawals.
Your loan servicer may change after closing, which is a common practice in the mortgage industry. If this occurs, the new servicer will send a notice with instructions on where to send payments, and you should ensure any automated payments are updated accordingly.