{"id":18598,"date":"2020-08-27T13:07:03","date_gmt":"2020-08-27T20:07:03","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=18598"},"modified":"2025-11-14T08:33:50","modified_gmt":"2025-11-14T16:33:50","slug":"buyer-when-is-the-first-mortgage-payment-due-after-closing","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/buyer-when-is-the-first-mortgage-payment-due-after-closing\/","title":{"rendered":"Hey, New Homeowner: Here\u2019s When Your First Mortgage Payment Will Be Due"},"content":{"rendered":"

After you\u2019ve signed all of those papers at the closing table and have the keys in your hand, it\u2019s finally real \u2014 you\u2019re a homeowner! Which means you have a brand-new responsibility, a mortgage<\/a> payment. Do you know when the first mortgage payment is due after closing<\/a>?<\/p>\n

Instead of figuring out when your first payment is due after you have closed, it\u2019s better to figure out when you want<\/i> to make your first payment, and then close accordingly. Here\u2019s what you should know.<\/p>\n\n\n\n\n\n

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When is the first mortgage payment due after closing?<\/b><\/h2>\n

You\u2019ll make your first payment on the first of the month after<\/i> you\u2019ve owned the home for 30 days. So if you close on July 18, your first mortgage payment will be due September 1. At closing, you will have to prepay the interest on your loan for the days when you own the house but have not yet made a payment. This interest payment will get wrapped into your closing costs<\/a>.<\/p>\n

Why?<\/b><\/h3>\n

Unlike rent, mortgages are paid in arrears<\/a>. This means that the lender will collect your mortgage payment at the end of a given period of time (the month, in this case) instead of at the beginning. It\u2019s the opposite of how we pay rent.<\/p>\n

\u201cWhen you\u2019re paying rent, you\u2019re paying for that next month,\u201d explains April Wise, Mortgage Underwriter and Associate Product Manager at HomeLight Home Loans<\/a>. \u201cWhen you\u2019re paying a mortgage, you\u2019re actually paying for the month behind.\u201d<\/p>\n

If you are going from renting a property to owning a property, you can arrange your payment so that you essentially get to \u201cskip\u201d a month before any housing payment is due. Or, since you won\u2019t have to make a payment until the following month, you could always continue to rent for one more month in order to give yourself more time to move everything out.<\/p>\n

Your first mortgage payment<\/a> will include the principal and the interest for the first full month that you own the home. You won\u2019t owe a principal payment for any \u201cextra\u201d days beyond that first full month, because you will have had to prepay the loan interest for those \u201cextra\u201d days at the time of closing.<\/p>\n

When your payment is due if you close…<\/b><\/h2>\n

Wise suggests that you double-check and verify whether your mortgage has transferred to the servicer prior to making your first payment. Usually, the lender that gives you the mortgage \u201cisn\u2019t going to the company that will collect your payments over the life of the loan; it\u2019s going to be transferred to the servicer.\u201d But the timing of this transfer doesn\u2019t always happen before your first payment, so it\u2019s safest to double check with your lender to determine where you should send that first payment.<\/p>\n

At the beginning of the month<\/b><\/h3>\n

More interest, more time: <\/b>If you close at the beginning of the month, you will have to pay the largest possible amount of interest at closing, but you\u2019ll also have a lot of time before you have to make your first mortgage payment<\/a>.<\/p>\n

End of the month<\/b><\/h3>\n

Less interest, less time: <\/b>If you close at the end of the month, you\u2019ll have barely any additional, prepaid interest to pay, but your first payment will come much sooner.<\/p>\n

However, if you close at the end of the month, \u201cyou run the risk of having a delay,\u201d says Adam Howell<\/a>, an experienced Rochester, Minnesota,<\/a> real estate agent who works with 69% more single-family homes than the average agent in his area.<\/p>\n

Delays can happen because the end of the month is often the busiest time of the month for the mortgage banker, attorney, closing company, or title office.<\/p>\n

Wise recommends that if you have saved up for closing costs<\/a> almost exactly to the penny (and not for interest), it may be best to close at the end of the month.<\/p>\n

Middle of the month<\/b><\/h3>\n

Not as much interest, decent amount of time: <\/b>If you choose the middle of the month to close, you will pay less interest and still leave yourself with a month and a half before the mortgage payments begin. This is why a lot of people choose the middle of the month; it\u2019s a happy medium in more than one way \u2014 and if the closing is delayed and takes place later in the month, you\u2019ll pay less at closing.<\/p>\n

Close before noon\u00a0<\/b><\/h3>\n

Howell says he often recommends closing in the morning because you may otherwise run the risk of the purchase not being funded. That means \u201cthe seller won\u2019t get their funds until the day after,\u201d he shares.<\/p>\n

If you close on a Friday afternoon and the purchase isn\u2019t funded until the next day, the seller doesn\u2019t get the funds until Monday. \u201cAnd then you run the risk of the seller saying, \u2018Well we\u2019re not actually closed until I get my funding.\u2019\u201d<\/p>\n

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<\/a> Source: (Amol Tyagi \/ Unsplash)<\/figcaption><\/figure>\n

When are payments considered late?<\/b><\/h2>\n

While mortgage payments are due on the 1st of the month, Wise says that they\u2019re generally not considered late until after the 15th. As for impacting your credit, she says that payments will generally not affect your credit until they\u2019re 30 days late. If you pay on the 16th, you will likely be charged a late fee, but you probably won\u2019t have anything show up on your credit report.<\/p>\n

However, this doesn\u2019t mean that Wise suggests that you put off making your payment.<\/p>\n

\u201cMy best piece of advice, and I think the best practice, is to pay a mortgage payment early; don\u2019t get in the habit of pushing it all the way out to the 15th because that spot for time is built in for you for cases of emergency.\u201d<\/p><\/blockquote>\n

Let\u2019s try it out!<\/b><\/h2>\n

Let\u2019s walk through three examples of when a mortgage payment would be due depending on the closing date selected.<\/p>\n

First, we\u2019ll calculate the daily interest rate (which will likely be listed on your Closing Disclosure as \u201cper diem interest\u201d). For the sake of these examples, let\u2019s imagine that you are borrowing $300,000 to buy a house at a 4% interest rate.<\/p>\n