When Is Your First Mortgage Payment Due?

Understanding when your first mortgage payment is due is important for new homeowners. This knowledge helps in financial planning and budgeting for ongoing housing costs.

General Rule for Your First Mortgage Payment

Your first mortgage payment follows a standard schedule, allowing a full month of interest to accrue before it’s due. It is due on the first day of the month, one full calendar month after you closed on your home. For example, if you close in June, your first payment will be due on August 1st. This ensures you receive the full benefit of the loan for a complete billing cycle.

Mortgage interest is paid in arrears, meaning you pay interest for the previous month. The first payment covers interest accumulated during the entire calendar month prior to the due date. This standard practice allows lenders to process the loan, establish the payment schedule, and ensure the borrower understands their obligations. It creates a predictable financial timeline for new homeowners.

Impact of Your Closing Date

The specific day you close on your home determines the start of your mortgage payment cycle. While the general rule of the first day of the following month applies, the closing date influences the amount of pre-paid interest required at closing. For instance, if you close on July 5th, your first mortgage payment will still be due on September 1st, giving you a full August to accrue interest.

If your closing occurs later in the month, such as on July 28th, your first payment will also be due on September 1st. The payment covers interest for the preceding full calendar month. The closing date primarily impacts the interest collected at the closing table, not the due date of your first full payment.

Understanding Pre-Paid Interest at Closing

At your mortgage closing, you will encounter a charge known as “pre-paid interest” or “per diem interest.” This amount covers the interest that accrues on your loan from your closing date through the end of that same calendar month. For example, if you close on August 15th, you will pay interest for the remaining 16 days of August at closing.

This pre-paid interest explains why your first regular mortgage payment is not due in the calendar month immediately following your closing. Since you paid interest for the partial closing month, your first regular payment covers the interest for the entire subsequent calendar month.

Finding Your Specific Payment Due Date

Locating the precise due date for your first mortgage payment involves reviewing key documents provided during closing. The Closing Disclosure (CD) is a primary document outlining all financial details of your loan, including the initial payment due date. This form provides a summary of your loan terms, closing costs, and the specific date your first payment is expected.

The promissory note is another important document. This legal agreement details your promise to repay the loan and clearly states the payment schedule, including your first installment’s due date, monthly payment amount, and where to send payments. Keep these documents accessible for reference as you manage your new mortgage.