When Do I Make My First Mortgage Payment?

My name’s Evan Kaufman, your loan originator, here to help explain.

Your first mortgage payment is not actually made immediately after closing on your home. How it works, I like to say, is this: you make your first mortgage payment the second month following your closing.

What I mean by that is, if you close—say in January, any time during the month of January—your first payment is not going to be due in February. It’s going to be due in March. That gives you a little bit of time.

Now, if you’re wondering why that is, let’s break it down.

How Interest Works at Closing

When you close on a home, you’re closing on a specific day of the month. It could be the 1st, it could be the 31st, or somewhere in between. What happens is that, at closing, you’ll pay a prorated amount of interest for the month in which you close.

If you look at your closing statement, you’ll see “prorated interest.” That’s the interest you owe for the number of days you owned the home during that month.

• If you close on the 1st of the month, you’ll have almost a full month of prorated interest due at closing.

• If you close at the end of the month, you’ll only owe a few days’ worth of prorated interest at closing.

Why Payments Are in Arrears

Mortgage payments are always paid in arrears. In other words, you’re paying after you’ve lived in the home.

For example:

• You live in your home during February.

• Your payment for that time is due on March 1st.

That’s why, if you close in January, you’ll pay prorated interest for January at closing. Then, on February 1st, you don’t actually make a payment, because you’re paying in arrears. Your first official payment will be March 1st, covering the time you lived in the home during February.

Planning Your Closing Date

Sometimes people try to “skip a payment” by closing at the very start of a month instead of the end of the previous one. For example:

• If you close January 31st, your first payment will be due in March.

• If you wait and close February 1st, your first payment won’t be due until April.

That does push your first payment back, but remember: closing at the start of the month means you’ll owe a full month’s prorated interest at closing, which increases your closing costs.

So, here’s the trade-off:

• Close late in the month → Less prorated interest due at closing, but your first payment comes sooner.

• Close early in the month → Higher prorated interest due at closing, but your first payment comes later.

Quick Examples

• Close in January → First payment due in March.

• Close in June → First payment due in August.

• Close in July → First payment due in September.

Refinances

With refinances, this timing can also make a difference. Sometimes, depending on the loan program, it can feel like you “skip” two payments—but that’s another discussion for another video.

Bottom Line: Your first mortgage payment is due the second month after closing.

• Close in January → Pay in March.

• Close in July → Pay in September.

I hope that helps demystify the process a little bit.

My name’s Evan Kaufman, your loan educator. Take care!