When is my first mortgage payment due?

Naturally, homebuyers often have questions regarding their new mortgage —  namely, when do mortgage payments start? And when is the first mortgage payment actually due — when the loan’s approved, when I close on the home, or some other time?

The timing of your first mortgage payment is important. You may need to manage cash flow carefully in the first few months after shelling out substantial sums for the down payment, closing costs and moving expenses. Budgeting is crucial if you’re also paying for renovations, new furniture or other large expenditures related to your new home.

When is the first mortgage payment due?

The due date for your initial mortgage payment depends on the closing date, and it’s usually more than 30 days away. Typically, you can estimate it by adding a month to the closing date, then figure your payment will be due on the first day of the following month.

For example, if you close on your mortgage on March 12, your first payment would be due on May 1. After that, you’d owe a mortgage payment on the first of each month. While it may seem like you’re skipping a payment, you’re not. That’s because mortgage payments are paid in arrears. In other words, your payments are for the previous month, not the current month.

You can find the due date for your initial payment among the documents you receive at closing. Look for a document titled “First Payment Letter” that contains the details you’ll need to make the payment.

How to prepare for your first mortgage payment

Amid closing and moving costs, you may find that coming up with your first mortgage payment on a new home within the same pay period will be a financial squeeze. To prepare for several large expenses at once, having a look at your household budget (or creating one, if you don’t have one yet) can be helpful.

Timing your closing date can also help with financial stress. If you’re able, schedule your closing to coincide with the end of your rental lease or close in time to the sale of your existing home. This way, you can minimize the juggling of rent and mortgage payments.

Additionally, you may want to trim back discretionary spending for a while. Eating out, clothing purchases, entertainment costs, and other non-essentials can be pared back or put on hold while you prioritize your new home and the expenses that go with it.

You may find it appropriate to dip into savings during this transition. Remember to replenish these funds as soon as you can once the new home purchase is settled, and only borrow what is necessary from yourself or other sources.

Factors that impact your mortgage payment timeline

Your first payment may be impacted by the date of your closing. If you close late in the month, you may prepay the tail end of that month’s mortgage payment at closing. This will also push forward your first payment due date with the mortgage company, as in the scenario mentioned above.

Making early payments may also impact your payment due date. Many banks allow you to make biweekly payments or early monthly payments toward your mortgage loan, though you may incur a fee for doing so.

What makes up your first mortgage payment?

Your mortgage payment includes the loan principal, interest and other items that the mortgage lender or servicer deposits into an escrow account, like taxes and homeowners insurance. The acronym PITI stands for these main components of your mortgage payment: principal, interest, taxes and insurance.

Your first mortgage payment will be largely interest, based on your loan’s amortization schedule. While your first year of homeowner’s insurance premiums are often included with closing costs, you can expect to pay a monthly amount toward your escrow account for annual taxes and insurance costs. These expenses will be wrapped into your monthly mortgage statement.

If you have to pay mortgage insurance, that premium will also be included in your mortgage payment.

How to make your first mortgage payment

You can choose one of many methods to pay your mortgage:

1. Auto-pay. Setting up recurring ACH payments from your checking or savings account is an easy way to make mortgage payments in a timely manner. Depending on your goals, you can split the monthly payment into two to save on mortgage interest, pay more each month to pay off your mortgage early, or sync payments with your paychecks to avoid overdrafts.
2. Online. Making payments on your lender’s portal or app is fast and reliable. If you plan to pay off your house early, paying online can be a convenient way to make extra principal payments when you have spare cash to put towards an early payoff.
3. By mail. If you prefer, you can send your monthly payment by mail using a personal check, cashier’s check or money order. Always include your mortgage account number on your check and allow enough time for delivery to avoid late charges.
4. By phone. Making a mortgage payment over the phone can be convenient, especially if you’re close to the due date and want to avoid incurring a late fee. Call the number on your mortgage statement and be ready to give the customer agent your mortgage account number and banking account information. Remember to ask the agent if there is a service charge for phone payments.

If you want to split payments or prepay your mortgage, ask your lender which if they are permitted and how extra payments are applied. For example, if you want to pay biweekly, ask your lender if they charge a set-up fee, transaction fee or a prepayment penalty. Also bear in mind, some lenders only apply your payments once a month even if you’re submitting two or more payments each month, which could negate any benefits to the strategy.

You will need to specify that you want any extra payments or over-payments to be applied to the principal balance of the loan — the main way you reap the savings benefits. This is not a default for many lenders, hence you need to spell it out to them.

What happens if you miss your mortgage due date?

If you miss your mortgage payment, be sure to pay as soon as possible. While one late payment likely won’t result in your eviction, repeated delinquencies it could potentially harm your credit. You typically have a grace period of 15 to 30 days to actually pay – this depends on your lender– and if a payment is made during that time, you are less likely to incur a penalty/late-fee charge. If you change banks or bank accounts, let your mortgage lender be one of the first to know your new account information.

If you’re struggling to make your mortgage payments, don’t delay contacting your lender about it. While nothing is guaranteed, your lender may waive late fees or agree not to notify the credit bureaus of a late payment if you make them aware of your situation. There’s also a chance you may qualify for a loan modification, repayment plan or a temporary reduction of payments.

Bottom line on the first mortgage payment

Purchasing a home is one of the most significant financial decisions you’ll make. Managing your payments successfully by making your payments on time each month is critical to avoid damaging your credit or, even worse, losing your home to foreclosure. To that end, set up automatic payments with your lender or set reminders on your mobile device, so you don’t forget a due date or miss a payment. It’s also wise to keep an emergency fund that can cover your mortgage payments temporarily if you face financial hardship in the future.

Additional reporting by Meaghan Hunt