How to make your first mortgage payment

Not sure how to make your first mortgage payment? Find out the common ways homeowners make their payments, plus the consequences if you miss one. (Shutterstock)

When it comes time to buy a home, many consumers use a mortgage loan to make their dreams of homeownership a reality. Once you take on a mortgage, you’ll owe monthly payments to your lender until you pay off the loan in full (including interest).

If you’re about to face your first mortgage payment, keep reading to learn when it’s due and the common ways to make a payment.

Credible helps you compare mortgage rates from multiple lenders.

• When is your first mortgage payment due?
• How to make your first mortgage payment
• How much will your first mortgage payment be?
• What happens if you miss a mortgage payment?

When is your first mortgage payment due?

Your first mortgage payment will generally be due about 30 days after your closing date. The first payment usually occurs at the start of the second month, after closing on the home loan.

For example, if you close on your home closer toward the end of the month, like Oct. 28, then you likely won’t owe anything for the first full month (in this case, November). The payment would instead be due in early December. 

There’s a common misconception that you’re paying for the current month of your mortgage with that first payment, but this isn’t true; you’re paying for the month prior. You can’t skip a mortgage payment by closing early in the month.

How to make your first mortgage payment

You can pay for your mortgage in a variety of different ways, such as:

• Pay online. Most mortgage lenders allow you to make payments digitally through an online account. 
• Enroll in autopay. When you enroll in autopay with the lender, you ensure payments get deducted from your account on time.
• Pay over the phone. It may also be possible to make a payment over the phone by calling your lender and giving them your information, but not all lenders offer this option.
• Mail a check. Mailing a check is usually a payment option available to mortgage borrowers, but generally this isn’t the safest or fastest option.

How much will your first mortgage payment be?

How much your first mortgage payment will be varies based on a few factors, such as: 

• Payment schedule — Some lenders allow you to make biweekly payments — half of your mortgage payment every other week — instead of one monthly payment. By making 26 biweekly payments, you effectively make one additional monthly payment over the course of a year. This can help you pay off your mortgage faster and save on interest charges.
• Your loan amount — However much you borrowed from your lender will naturally affect the size of your mortgage payment. A larger loan amount means a more expensive monthly payment.
• Interest rate — Mortgages come with fixed or variable interest rates. A fixed interest rate remains the same over the life of the loan, whereas a variable interest rate can change over time. If you have a variable interest rate, your first payment will depend on the current interest rate at that time. Try to negotiate a better mortgage rate before securing your loan.

Factors that make up your mortgage payment

Mortgage payments are often made up of four different components:

• Principal — This is the amount you borrowed that needs to be paid back to the lender.
• Interest — The interest is essentially the fee the mortgage lender charges you to borrow money.
• Taxes — You’ll need to pay property taxes on your home. The amount you pay depends on the state and county you live in and is generally rolled into your mortgage payment and held in an escrow account until the tax bill comes due.
• Insurance — This includes the payments for your closing costs as well as premiums for your homeowners insurance, private mortgage insurance (PMI), flood insurance and legal insurance.

WHAT YOU NEED TO KNOW ABOUT THE MORTGAGE INTEREST DEDUCTION

What happens if you miss a mortgage payment?

If you miss a mortgage payment, the lender might offer a grace period for a one-time missed payment before charging a late fee. But this isn’t a guarantee, so it’s always a good idea to check with your lender beforehand and make mortgage payments on time. Your Closing Disclosure should have information explaining how much late fees are for a missed payment.

If you miss multiple payments, this can really damage your credit score, as lenders have the option to report late payments to the credit bureaus when they’re more than 30 days late.

Even worse, missing multiple payments can lead to foreclosure. After three consecutive months of missing payments, the lender can decide to move forward with foreclosure as soon as 30 days later, or four months after you became delinquent.

You can easily compare mortgage rates from multiple lenders without affecting your credit when you use Credible.

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