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When is My First Mortgage Payment Due After Closing? 

 March 29, 2021

By Scott Teesdale  

minutes read time

One of the first questions new homeowners ask is when is my first mortgage payment due? Let us help with that! Your first mortgage payment is due on the first day of the second month that follows your mortgage closing. Furthermore, before your first mortgage payment, you have to pay your down payment and closing costs on the home, which are separate from your mortgage payments.

Paying your first mortgage payment in the second month after you close on your home will give you some time to breathe between your closing costs and downpayment and paying your mortgage. Learning how mortgages work can help your first mortgage payment go smoothly. 

Calculating your first mortgage payment due date

If you’re worried about the exact day you might have to make your first mortgage payment, you’re not alone. It’s common for new home buyers to be anxious about exactly what day they need to make a payment. You can calculate your mortgage payment due date by first looking at what day your closing date will be or was. After you’ve nailed down the closing date, the next step is adding a month to that closing date and then looking at the first day of the following month after that. For example, if you closed on a house on July 14th and then added a month, it brings you to August 14th. After that, the next month is September so your first mortgage payment would most likely be due on the first day of September. If you still have questions, you can always reference our mortgage guide for first-time home buyers

Use your time wisely

When it comes to paying your mortgage and getting the most out of your time, it’s best to be smart about when you close on your new home. You might be anxious to close immediately but if you’re wise about when you can actually close, you can make it so you have more time between the day you pay your closing costs/down payment and the day you pay your first mortgage payment. You can get the most out of your time by aiming to close on your home at the beginning of the month. That way, you’ll have a longer period of time to accumulate more money and collect more checks to get ready for your first payment. Not using your time wisely is one of the most common mortgage mistakes first-time homebuyers make.

This is one popular strategy, but it’s important to remember that interest will start accumulating on your loan the day you close, and the longer you wait to pay it, the more interest you’ll have to pay on that first payment. Finding the right balance of time to pass between closing and your first payment is the best way that you can take advantage of the system and do what fits your financial situation the best. 

Included in the mortgage payment

Once it’s time to start paying your mortgage, you might be wondering what is all included in the payment. There are four factors that make up your mortgage payment (commonly referred to as PITI). 

  • Principal: The borrowed amount you owe;
  • Interest: The mortgage interest that your lender charges on the money you borrowed;
  • Taxes: Taxes based on your home’s value;
  • Insurance: Property coverage in the form of homeowners insurance.

You can use a mortgage calculator, like this one on Bankrate, to determine how much you might have to pay when including all four of these factors into your payment. These are all factors to consider when choosing a mortgage.

Rent vs. Mortgage

If you were renting before buying a home then you might be inclined to think paying rent is similar to paying your mortgage, but that’s not the case. When renting, you typically pay for the month in advance compared to paying a mortgage where you’re paying for the previous month. This previous month that you’re paying for is called paying for arrears.

Paying first mortgage payment at closing

This could lead many new home buyers to want to pay their first mortgage payments at the time of closing so they can knock it out along with their closing costs, down payment, and other fees. You won’t make a full mortgage payment at this time because you’ll be responsible for paying the interest on your home instead. This is more imperative to do for many home buyers because interest starts accumulating on the day you close and won’t stop until you finally pay off the loans or sell your house.

This is why it’s important that you realize how to allocate your money so that you’re able to pay for your first mortgage payment and all of the other costs and fees associated with buying a new home. It’s also a good idea to decide things about your mortgage like whether you want to pay property tax directly or include it in your mortgage payments

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I use data and technology to help Millennials navigate the ins-and-outs of buying or selling a home in today's market. From appraisals to mortgages to zoning, I cover it all with the goal to teach others. Connect with me on social via the icons above.

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