Financing in Denver>Question Details

Kristi Maris, Home Buyer in Colorado

Question about closing and when first mortgage payment would be due on a 30 year fixed FHA loan.

Asked by Kristi Maris, Colorado Thu Dec 27, 2012

We are buying a house (FHA) and hoping to close soon. My question is this - say if we close on January 20th - how many days after closing would our first payment be due? It is my understanding that your first payment is due 60 days later, so that would make our payment due on March 20th if I am understanding this correct. We need to pick our closing date and I dont want to miss any days of basically "free" mortgage time. Are lenders different or do they follow the same guideline - first payment is due 60 days after closing? I have reached out to my lender but he is out of town until January 2nd so I am just trying to see if there is a "standard period" before your first mortgage payment is due or it is all discrectionary and completely up to lender. Do they all use the same guidelines or can this be different depending on which mortgage company we use? Thanks in advance for your help on this.

0 votes Share Flag Financing in Denver

Help the community by answering this question:


Closing on January 20th would make your 1st payment due March 1st. If you close within the first 5 days of the month, the lender & you have the option of making your 1st payment due the 1st of the immediate month (i.e. closing on February 1st through the 5th would allow the option of having a 1st month's payment of March 1st).

There are no days of "free" mortgage time, you are always charged interest the day your mortgage funds. Mortgage interest is typically paid in arrears, meaning the payment that is due on March 1st has two parts - the principal portion that is due for March & the interest that accrued during February (28 days).

If you close on January 20th, then on the closing statement ("Final HUD-1" it is called), you will be charged interest by the lender from January 20th until your 1st mortgage payment starts covering the interest - meaning January 20th through January 31st (12 days of interest). Paying that interest at closing is called "pre-paid interest", because you are prepaying the interest rather than paying it in arrears.

If you were to close on February 3rd, and asked for a 1st mortgage payment due date of March 1st, then instead of being charged interest at closing, you would be given an "interest credit" (instead of being charged interest) from the lender of 2 days (Feb 1st & Feb 2nd)... and your March 1st payment would be a normal full payment.

January 20th 2013 is a Sunday though, so there isn't any way for you to close then. January 21st is when you would actually close, so change the above examples accordingly.

Shane Milne | Lending in all 50 states | NMLS #81195
3 votes Thank Flag Link Thu Dec 27, 2012
March 1st.
Jim Simms

NMLS # 6395
Financing Kentucky One Home at a Time
Web Reference:
1 vote Thank Flag Link Fri Dec 28, 2012
Hi again Kristi, In Colorado, generally, mortgage interest is paid in arrears (that means that a payment made, for example, on March 1st, will be paying the interest due for February). Most 1st mortgage home loans are due on the 1st of each month (with a 15 day grace period). So, if you close on January 20th, you will be charged interest on the new loan at closing for the remaining days in January (12 of pre-paid interest); then the 1st official loan payment will be due March 1st (covering February's interest) and so on.
1 vote Thank Flag Link Fri Dec 28, 2012
There is no free mortgage time! You will pay daily interest from the day your loan closes to the end of the month, close January 20 and you will pay 11 days interest in escrow and your first payment will be March 1st which will pay February's interest. The closer you close to the end of the month the fewer days interest you will pay. This will be the same for any lender you chose. Your loan payment will be due on the first of the month not 60 days from close unless you close on the first of the month. But remember you will pay 30 days interest in escrow if you close on the first or your payment will be due in 30 days. Have a talk with your loan officer to confirm and discuss the best closing date for your situation. Good Luck
1 vote Thank Flag Link Thu Dec 27, 2012
Hi Kristi - your purchase is a short sale. Do you have a Letter of Approval from the Lien Holder authorizing the sale? If not, your closing date may only be something you and the seller agreed to. I see you asked a LOT of questions on Trulia about your closing -- so just mentioning this now as it is very important. As for when your first payment is do and funds at closing, you may find it is more helpful to close on the last day of the month in January - the 31st. This will mean your first payment is due on March 1st, but more importantly, you can avoid bringing an additional 11 days interest payments to the closing table in addition to your 3.5% down payment.
0 votes Thank Flag Link Fri Dec 28, 2012

Followup and correction from previously answered question. Mortgage interest is paid in arrears. So as Carl says below, you will be paying 11 days interest in escrow at closing. you will see in on the closing statement. Again, your 1st payment will be due on March 1st. this will be the February interest and a small amount of principle. Lender's set up the 1st payment on the 1st of the month and every month thereafter. I hope your home turns out to be a blessing.

Robert McGuire ASR
Your Castle Real Estate
Direct - 303-669-1246
0 votes Thank Flag Link Thu Dec 27, 2012

Your first payment will be due March 1st. I explained it in detail in your other post.

Best of luck!

Marina Bay
Cherry Creek Properties
0 votes Thank Flag Link Thu Dec 27, 2012
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer