When is your First Mortgage Payment Due?
When purchasing or refinancing a home and putting a mortgage into place a consumer needs to understand the mechanics of how the process works to starting your scheduled mortgage payment. This short article will explain how it works.
The first thing one needs to understand is a mortgage payment is a payment in arrears. Mortgage payments are typically due on the 1st of the month and allow 15 days to make the payment without a late charge or interest. For example, if your first payment starts on September 1 you are paying for interest for the month of August. This is opposite to a rent payment which reflects time you are going to spend in the property or apartment.
So let’s review a complete example. Let’s say your home is closing on the March 10th. The title company will collect interest from the 10th to the end of the month you are closing in. This is termed prepaid interest. Your first payment will be due on May 1st because this will cover interest for the month of April.
As always, please reach out to your Loan Officer at Hall Financial to learn more about different mortgage options and understanding the process.