When is my first payment due?
When is my first payment due?
This is one of the most common questions we get asked during the loan process, and one that is easily answered. Jump to the type of loan you are doing below for the answer and options.
PURCHASE
If you are purchasing a home, the first payment will be the 1st day of the month after next month. For example, if you close on a purchase on May 24th, your first payment is due on July 1. This is because a mortgage payment and rent payments are the opposite. When you pay rent, you are paying for the month you are about to live in the space, but with a mortgage you are paying for the month you’ve already lived there. In the scenario above, the July 1 payment covers the month of June, which is why there is no June 1 payment. The lender will collect the interest only portion of the payment between the date of closing (May 24th) and the last day of the month (May 31st) to cover the payment portion for the month you close in.
REFINANCE
When you refinance just as when you purchase, your first payment will end up being the first day of the month after the month you close. For example, closing on May 24th means your first payment is due on July 1. However, if you are able to close your refinance in the first 15 days of the month, you can typically “skip” two payments. Let’s say you are closing on May 5th, and instead of making a May 1 payment you can wait to do so, and your payoff from your current servicer will include the interest you would owe anyways for this payment. Instead of making the payment directly to your loan servicer, your lender may be able to include the slightly higher amount in your payoff, allowing you to “skip” your May mortgage payment, and then have no payment due in June, with the first payment on July 1. Please note that we only use the first 15 days of the month for this option because after this time the payment is counted as late by the servicer, and additional fees apply.
In summary, your first payment will always be the first of the month after the month you close, and your lender should have no problem guiding you towards answers on questions like these. Our team makes sure that this information is supplied accurately, and any options that exist are presented to each borrower because everyone’s situation is unique. For help regarding questions on your own situations, please feel free to reach out to us anytime.
For help with how to make your payment, please check fairwaynext.com
