Your First Mortgage Payment. When Do You Pay It? 

Embarking on your homeownership journey is an exciting milestone, but it also introduces new responsibilities, like making your first mortgage payment.    

It seems simple enough – just send the money – but like anything else, you don't know what you don't know. Understanding when and how to manage this payment can ease the transition from first-time home buyer to homeowner. The timing of your first mortgage payment is linked to your closing date and generally falls more than 30 days after the closing. You can determine when it's due by adding a month to your closing date. Then, the payment is typically expected on the first day of the following month. 

The following is the transcript of the video above about when home buyers make their first mortgage payment. 

__________

Embarking on your homeownership journey is an exciting milestone, but it also introduces new responsibilities, like making your first mortgage payment.

It seems simple enough – just send the money – but like anything else, you don't know what you don't know. Understanding when and how to manage this payment can ease the transition from first-time home buyer to homeowner.

So when is your first mortgage payment due? 

The timing of your first mortgage payment is linked to your closing date and generally falls more than 30 days after the closing. You can determine when it's due by adding a month to your closing date. Then, the payment is typically expected on the first day of the following month. For example, if you close on March 8th, your first payment will be due May 1st.

This schedule might seem like you're skipping a month; however, your mortgage payments, unlike rent payments, cover the previous month's occupancy, not the current one. 

At closing, you will pay the interest for each day remaining in the month you close. Using the example above, closing on March 8th would require the payment of daily interest from the 8th through the 31st.  

Your first and subsequent mortgage payments include principal, interest, taxes, and insurance, which make your total monthly payment. If your down payment was less than 20 percent, you will likely also be paying mortgage insurance. 

If you live in a condominium, you will also have a homeowners association fee, also known as a condo fee. The condo fee is typically paid separately from your total mortgage payment. 

At the beginning of your loan term, most of your payment will go towards paying off the interest on the loan, meaning only a tiny portion of your payment will go towards paying down the principal amount you borrowed. 

Making additional principal payments over your loan term is an excellent idea. You can significantly reduce the interest you will pay over time.

What if you miss a payment? 

If you miss a payment, address it promptly to avoid affecting your credit. Lenders typically offer a grace period of 15 to 30 days. If you pay during that time, you are less likely to incur a penalty or late fee charge.

Communicate with your lender if you anticipate difficulties making timely payments. They may offer solutions like a loan modification or a temporary payment reduction.