When is my mortgage payment due?

For those who are moving from the wonderful world of rentals into their first purchased home, there is a LOT of information to take in. One of the biggest concerns for new buyers is making sure that they understand the timeline for making those mortgage payments to avoid penalties, credit dings, or just overall uncertainty. Here's a helpful guide to navigating the world of mortgage payment timelines.

When is my first payment due?

After closing on a home, your first payment is generally not due until the 1st of the month following 30 days of your closing date. Sounds a bit tricky, but think of it like this. If you close on November 15, your first payment would not normally be due to your mortgage provider until January 1. So you wait 30 days and then it is the start of the next full month.

When is my mortgage due?

Most mortgages (we will need to leave lease purchases and seller financing aside for the time being) have a payment schedule set up in which the mortgage payment is due on the 1st day of the month, but is not late until after the 15th of the month. This means that officially, it is supposed to be paid on that 1st day. However, you will not be assessed any of the penalties outlined in your particular note until after the 15th of the month.

So should I just wait until the 15th to pay?

That depends on your particular life and financial situation. Waiting till the last possible moment to make the payment leaves no room for error. Sometimes there may be a bank glitch, or an internet issue, or a mailing error. Other times a life emergency may arise and leave you no time to make up the funds. Some people feel comfortable taking the risks, and others don’t want to leave anything to chance.

Keep in mind though that even if you delay payment, the interest still accrues for every day the mortgage is outstanding. So that first month you got to “skip” when you closed- interest for those days has been added on to the end of the mortgage.

What happens if I am late?

Again, we first have to tell you to review the terms of your individual loan. Possible penalties include a late fee (ranging from 5-10% of the payment amount), reporting to credit agencies, and even start of the foreclosure process. There may be additional administrative penalties added in as well depending on the particular mortgage company and its policies.

I’m under contract selling my home and closing soon, should I make my payment?

Again, you would have to look at your particular situation and assess your particular comfort level with risk. But here’s what we can tell you. If your home is scheduled to close after the 15th of the month and you have the ability to make the payment that month, it is often best to just go ahead and make the payment. Mortgage companies have to account for every penny and every day that the mortgage exists- no more, no less.

Example: If you made the payment on April 1, but close on April 20, the payoff amount you get at closing should reflect only amounts due through April 20. If you overpaid, a reimbursement will be issued to you by the mortgage company at a later date, or the payoff amount adjusted to reflect your overpayment (depending on how efficiently the amounts are processed).

If you decide not to make the payment, the title company will have a different payoff amount for you based on amounts owed through the 20t, so all should be made right at the closing table. But you could also risk having a negative credit impact from the late payment, or worse- an even bigger penalty if the closing is delayed.

Always consult with an attorney or tax professional when making decisions on the financial impact of selling a home.