You've finally signed your final loan paperwork in a long and grueling closing meeting with your lender, the seller and your real estate agents. You get the keys to your new home and you're in. So now what? Now you've got to start making payments, that's what. But relax — you have a little bit of time before writing your first check.
One Month Break
After you close your loan, you generally skip a month before having to make your first official payment. So if the loan closes in January, you skip February, and the payment is due on the first of March. This is because your payment includes interest due for the previous month. So in this example, the March payment covers the interest that accrued during February.
Usually Due on the First
The common terms of a mortgage loan agreement state that payments are due on the first of the month. So regardless of what day in the month you close after buying your new home, your payment is due on the first. Lenders commonly give you a 15-day grace period to make the payment before being assessed late charges. Avoid going 30 days late on your mortgage payment, as this negatively affects your credit score.
When you close a loan, the lender often requires you to pay prepaid, or "per diem" interest. This is to account for the time between taking possession of the house and the beginning of interest accruals for the following month. Interest officially starts accruing on the closing date. Say you close your loan on the 15th day of May and your first payment is due on July the first. You have to pay for interest between May 15 and 31 at closing. So technically, you're making your very first mortgage payment at the closing table.
Ways to Pay
In the past, you could only pay your mortgage bill with a check in the mail. Now you have that option, but you can also make the payment more conveniently using the bank's online ACH (Automated Clearing House) payment system, if available. You must schedule the mortgage payment in advance of the due date, so that the lender can withdraw the funds from your checking account. Also, since major banks often have branches all over the country, you can walk your mortgage payment (check, money order or cash) into a location. According to the FTC (Federal Trade Commission) website, "The servicer must credit a payment to your loan account as of the day it is received."
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