When Is Your First Mortgage Payment Due?

You’ve finally signed your closing documents and completed the homebuying process. Congratulations… you’re officially a homeowner! Next, it’s time to start moving in and preparing for your first mortgage payment.

While paying your mortgage can be similar to paying rent, it’ll require a little more work on your end. 

First and foremost: When is your first mortgage payment due? 

In this post, we’ll discuss everything you need to know about your first mortgage payment, including what it consists of, how to make it, and what happens if you miss a payment. 

Let’s get started! 

When Is Your First Mortgage Payment Due?

So, when is your first mortgage payment due? Typically, your first mortgage payment is due on the first day of the month after the first full month of owning the home, and after the day you pay closing costs and complete your real estate transaction. 

For instance, if you close on July 15th, your first monthly mortgage payment is due September 1st. If you close on August 5th, your first payment is due October 1st. Simple enough, right?

Factors That May Impact Mortgage Payment Schedule

There are a couple of instances where your first payment date will deviate from what we just mentioned.

The first involves the 60-day grace period you have after transferring a loan to a new servicer. According to the Real Estate Settlement Procedures Act (RESPA), if you send an on-time mortgage payment to an order lender by mistake, you cannot be charged a late fee, and your new lender can’t report it as a late payment to a credit bureau.

This matters because some months have 31 days in them. For example, if you complete your home purchase on July 1st, your first mortgage payment is likely due at the end of August, not September 1st. July and August have 31 days in them, exceeding the 60-day grace period, so pay attention to your closing date.

If your bank or lending institution lets you make biweekly payments or allows you to pay early, this can also impact when you begin making payments. Biweekly payments can be a great way to pay down your loan principal faster and shave a couple of years off your amortization schedule. Play around with a mortgage calculator to see how it works, but be mindful that not every lending institution approves biweekly payments. They may charge you a fee when doing so, so check with your mortgage lender beforehand.

Finally, ask your lender if you’re unsure when your payment due date is.

What Do Your Mortgage Payments Consist Of?

Your mortgage payment typically consists of four things:

• Principal payment
• Mortgage interest
• Taxes (e.g., property taxes)
• Homeowners insurance

Often, you’ll pay homeowners insurance and property taxes as a lump sum based on what’s in your escrow account. Beyond that, homeowners insurance is usually paid once a year, while property taxes are due bi-annually but are divided into monthly payments.

While your homeowners insurance and property taxes may vary from year to year, if you have a fixed interest rate, one of the coolest things about homeownership is that your monthly mortgage payments stay consistent. If the combined principal and interest on your mortgage is $2,000 in 2023, it’ll still be $2,000 in 2033 (unless you refinance, but in that case, you’ll have a new mortgage with a different interest rate). What does change is how much goes to your principal balance and how much goes to your interest payment.

What Is Your Principal Balance?

Your principal balance is the mortgage loan amount you borrow from a lender. If you buy a new home for $800k with a $160k down payment, the principal balance of your home loan is $640k. Simply put:

Principal Balance = Purchase Price – Down Payment

What Is Your Interest Payment?

Borrowers don’t get hundreds of thousands of dollars without paying anything extra in return. Lenders have to make money on these loans, and they do so by charging you interest.

Many first-time homebuyers are shocked to discover that you pay a lot of money toward your mortgage interest each month — even if you have a low-interest rate. Let’s say you take out a 30-year loan for $640,000 at a 5% interest rate. After 360 monthly payments (30 years), you’ll pay a total of $1,236,837.02 on your loan, which includes $596,837.02 in interest.

At first, a majority of your amount goes to interest. However, as you pay down your principal, more and more of your loan payments go toward your principal balance. This is because your monthly interest payment is calculated as follows:

Principal Loan Amount x (Annual Interest Rate/12)

As your principal loan amount decreases, the interest you pay each month also decreases.

How Do You Make a Mortgage Payment?

You pay your mortgage the same way you pay your rent. That said, there are multiple avenues for you to consider, including:

• Paying online: Your lender can help you set up an online account to pay your mortgage with a debit card or an electronic check.
• Enrolling in autopay: Using autopay is a great way to avoid late mortgage payments. Simply set up your account to have your mortgage payment paid at the beginning of the month each month. You won’t have to think about it again, as long as you’ve got the funds to cover it.
• Paying via phone: Some lenders will accept your payment over the phone. Make sure you’ve got your debit card or bank account number ready!
• Snail mail: You can also go the old-school method and mail a check to your lender. However, this is the least recommended option because your check may get stolen and cashed, and you may not realize it until you receive a notice from your lender that your payment is late.

Can Your First Mortgage Payment Be Included in Your Closing Costs?

While your closing costs include about a bazillion things, your mortgage payment is not one of them.

When Is Your Mortgage Payment Considered Late?

Every lender works a little differently, but typically your payment is considered late if you haven’t paid within the first 15 days of when it’s due. If your mortgage payment is due on the first of the month, it’s considered late on the 16th.

Check with your mortgage lender to figure out what the rules are surrounding late payments and what the penalty fees are.

What Happens if You Miss a Payment?

You don’t have to worry about foreclosure if you miss one payment. However, your credit score will probably take a hit. Mortgage companies understand that there are plenty of reasons why you might’ve missed a payment. You might’ve...

• Switched bank accounts
• Had insufficient funds in your account
• Set up autopay incorrectly
• Simply forgot to make the payment

Are You Ready to Buy a Home?

Before you make your first mortgage payment, you’ve got to buy a home — and at Aalto, we’re here to help you find the perfect place.

Our goal is to make your homebuying process a smooth, modern experience. We handle all the legal paperwork and negotiations on your behalf, have exclusive inventory, and offer buyers cash back on their purchase, making your real estate transaction less stressful and more enjoyable.

Are you ready to take the leap into homebuying? Get started with Aalto today!