When is Your First Mortgage Payment Due?
By Elizabeth Weintraub. Home Buying/Selling Expert
Elizabeth Weintraub has an extensive background in real estate spanning more than 30 years, including experience in related industries such as title and escrow. She is a full-time broker-associate at Lyon Real Estate's midtown Sacramento office and is recognized as a top producer. She is also a Life Member of the Master's Club, an honor bestowed by the Sacramento Board of REALTORS®, and ranks in the top 1% of all the agents at Lyon Real Estate.
CA BRE License #00697006
Question: When is Your First Mortgage Payment Due?
That's a long word that basically means your unpaid balance is re-calculated every month and by the end of your mortgage period, your loan will be paid off.
Mortgage Interest is Paid in Arrears
You may have heard that phrase but did not know what it meant. Unlike a rent payment, which is paid in advance, your mortgage payment
is paid after the fact.
If you rented a home on June 1, your rent would be due June 1 because it pays for the month of June in advance.
When Do You Make Your First Mortgage Payment?
When your buy a home and obtain a mortgage, the closing agent will collect interest from you.
The interest is charged on your closing statement as a closing cost.
- A mortgage payment consists of two parts: mortgage interest and mortgage principal.
- Interest is always paid 30 days in arrears.
- The principal portion of your mortgage payment reduces your principal balance on the date it is due.
If your closing date, for example, is March 15, you will be charged prorated daily interest from March 15th through March 31st on your closing statement. Your first mortgage payment will be May 1 because that payment will pay the interest for April.Source: homebuying.about.com