Do you want to know if mortgage payments start right away? My experience has shown that since mortgages are paid on the first of each month and in arrears, you usually get your first payment on the first of the following month after moving into your new house for 30 days.
Accordingly, your first payment is due on July 1 if you close on your home on May 25. But that is not all; I will enlighten you further as you read.
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Now, let’s get started.
How Soon Do Mortgage Payments Start
Usually, on the first day of the month following your closing date, the first mortgage payment is due.
You are paying for the prior month, not the current month, when you make mortgage payments.
You may pay your mortgage in a number of ways, including online via your servicer’s site or by establishing autopay.
Naturally, prospective homeowners frequently have inquiries about their new mortgage, one of them being when mortgage payments begin.
And when exactly is the first mortgage payment due—at the moment of closing on the house, when the loan is granted, or at another point in time?
Your first mortgage payment is due on the closing date, which is often more than 30 days away.
The best way to estimate it is to add one month to the closing date and calculate that your payment is due on the first of the subsequent month.
How Much Will Your First Mortgage Payment Be
You should review the closing disclosure document to determine the amount of your initial mortgage payment.
This form will be delivered to you at least three days before the closing date, and it will contain information on your monthly mortgage payment amount.
If you have a mortgage with a fixed rate, your initial payment will be the same as each successive payment you make during the duration of the mortgage.
The only thing to keep in mind is that your payment could be changed to accommodate increasing property taxes or homeowner’s insurance, both of which are paid from your escrow account.
If you have a loan with a variable interest rate, the amount that is shown on the closing disclosure form will be the amount that you pay for your first mortgage payment.
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How Long Can You Wait To Make A Mortgage Payment
When it comes to mortgage payments, the first of the month is often the due date. However, there is typically a grace period that allows you some breathing room before you are charged a late fee. Although the length of this grace period varies from lender to lender, it is often somewhere around 15 days.
The grace period allows you to pay your mortgage on the first of the month without penalties until the sixteenth.
It is in your best interest to make your monthly mortgage payments before the due date; however, you may still avoid incurring late penalties by making your payments before the end of your mortgage grace period.
Late penalties might be anywhere from three percent to six percent of the total amount of your monthly payment.
It is recommended that you consult your mortgage contract or get in touch with your lender if you need clarification on the length of your grace period.
This will help you to determine the precise number of days that your grace period provides for payment before your lender charges you a late fee.
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How Does Mortgage Payment Work
Four components usually make up your monthly mortgage payment: the principle of the loan, the interest on the loan, taxes, and insurance.
The fact that a mortgage payment is comprised of so many different components could come as a surprise to someone who has never owned a house before.
Including all of these expenses in a single monthly payment is one way that your lender can make things simpler for you.
Instead of having to keep track of individual invoices and dates by which they are due, you have a system that assists you in ensuring that these costs are paid on time and in full.
There are two of these components that might be included in what is known as an escrow account. These are property taxes and insurance bills.
If your mortgage has an escrow account, some of your monthly payments will support it. When due, your lender will remit payment for your property taxes and homeowners insurance.
One of the advantages that this arrangement offers to you is that it may assist you in planning for such payments and ensuring that you have the money put aside for them, relieving you of the need to think about it.
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When Is My First Mortgage Payment Due
Closing determines the date of your first payment. It is located alongside the payment instructions on your First Payment Letter.
The first of the month following a full month after the closing date is usually the payment date.
Therefore, your payment would be payable on November 1 regardless of when you close—September 2 or September 15.
However, interest is still assessed throughout the first month of ownership, so the closer you are to the end of the month, the less interest you will have to pay.
Remember that you must make your first payment by sixty days following your closing date, so be mindful of months that contain thirty days instead of thirty.
For instance, since there are 31 days in March, your first payment would need to be made before May 1 if you closed on March 1.
You would have to close by March 2 at the latest to make your first payment on May 1.
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How To Make Your First Mortgage Payment
Usually, you choose how you want to pay your mortgage. However, you may think about the following options:
1. Make an online payment. You have three options for making an online payment:
· Using an electronic check
· Just signing in
· Having your linked account debited before the due date
2. Set up automatic payments. To ensure that you don’t miss any payments, you can also decide to set up automated payments online with the lender.
3. Make a phone payment. To make payments over the phone, you may always give your lender a call. Just confirm that this is an option offered by your lender.
4. Checks should be sent. When it comes to paying bills, this ought to be your final priority. We do not advise mailing checks for payments as there are few safeguards against checks being stolen and cashed.
5. Advice: To ensure that everything is credited correctly, you should engage directly with the lender if you have a unique repayment schedule, such as biweekly installments.
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Final Thought
Now that we have established that mortgage payments start right away, it’s comforting to know that your grace period allows you to make payments without incurring penalties even if you miss your mortgage due date or other circumstances prohibit you from paying on time.
However, you should try your best to pay on time because missing payments might have a negative impact on your credit score.
To make sure that late payments are recorded correctly and that there isn’t false information on your report, it’s also a good idea to periodically check your credit report for free with Experian.
To find out where your credit stands and how you might raise it, you should also think about obtaining your FICO Score.