Question about closing and when first payment would be due

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.

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James Ponzi, Agent, Denver, CO
Thu Dec 27, 2012
Hi Kristi,

If you close on January 20th, your first payment would be due on March 1st, 2013. Also, there is no "free mortgage time" since mortgage interest is paid "per diem" meaning you pay interest on every day you have a mortgage balance. Depending on when you close, you may have more or less time until the first payment is due, but you're still paying for every single day regardless. For FHA and conventional mortgages, they all do it the same way. Sometimes a HELOC type loan has a different payment schedule, but the "per diem" still applies there too.
1 vote
Aschmidt, Home Buyer, Denver, CO
Fri Nov 18, 2016
I closed on the 4th of November, got my first mortgage statement today, due December 1st. its a crunch starting utilities, appliance purchasing AND budgeting to make first mtg payment in A 3 week period.
0 votes
I bet! This is what im worried about... Im suppose to close on April 7th.
Flag Thu Mar 23, 2017
Robert McGui…, Agent, Denver, CO
Thu Dec 27, 2012

This is also a question for you Buyer's Agent who knows more about your specific loan situation than any of us would. Under normal circumstances, if you close on January 20th, your first payment would be due on March 1st. Your 'free' mortgage time would be from January 20th to March 1st. Mortgage payments almost always start on the 1st of the month. But it really isn't 'free', it would be that the March interest is paid up front in your closing costs. You will pay it one way or the other. Either sooner or later. There is no 'free' lunch and no free mortgage time. Again, don't hesitate to check in with your Buyer Broker. He or she is getting paid well to represent you and answer your questions. Congratulations on your home purchase. You have made a great decision.

Robert McGuire ASR
Your Castle Real Estate
Direct - 303-669-1246
0 votes
Kasha Songer, Agent, Denver, CO
Thu Dec 27, 2012
Hi Kristi,

You've gotten some very good answers here. It will be due on March 1st. There are no free days. The only thing I don't see mentioned is your grace period. At closing the Closer will mention that your payments are due on the 1st and that you have a grace period until the 15th of the month. It's clear you're thrifty, do not use that grace period for at least the first year of your mortgage in an attempt to save a few cents. I know of two buyers who nearly lost their new loans for using the grace period in the first year.

Congratulations and Good Luck!

Kasha Songer
Certified Residential Specialist
Preferred Properties, Inc.
0 votes
I've sent my payment (due on the 1st) in the first week of the month ever since I moved in ... abt 3 years ago and it has NEVER affected my credit! ???
Flag Tue May 30, 2017
Kristi Maris, Home Buyer, Colorado
Thu Dec 27, 2012
You all have been amazing. I clearly understand what they were telling now. It just helps to hear it a couple of different ways for it to sink in. THANK YOU ALL VERY MUCH. This is exactly what I was looking for. Have a great and safe New Year's everyone>
0 votes
Marina Bay, Agent, Greenwood Village, CO
Thu Dec 27, 2012

Your first payment will be due on March 1st. At closing you will pay your monthly pro rated mortgage from the day of closing til the end of the month of January. On March 1st, you will pay your February mortgage payment.

Your agent will be able to explain this to you as well.

Marina Bay
Cherry Creek Properties
0 votes
Tony & Karen…, Agent, Denver, CO
Thu Dec 27, 2012

Generally your first monthly payment will be due on the first of the second month after you close. That's where you're getting the (mistaken) 60 days figure. For instance, if you close on Jan 20, part of what you pay at closing will include the mortgage interest for the 20th through the end of that month (10 days). However, when you start making your monthly mortgage payments, the interest you pay is always collected in arrears - that is, you pay the interest for the previous month. Since you paid interest for Jan 20 - Jan 31 at closing, the next month's worth of interest (for February) will be due on the first of March. So it looks like you get to skip your first month (February's) payment. You don't explicitly notice the 10 days you pay for January because it's all mixed in with your other closing costs. However, the later in the month you close, the less interest you'll have to pay for the remainder of that month (and the lower costs you'll have) at closing.

Hope this helps, and congratulations on your new home!
0 votes
Chuck Strau…, Agent, Denver, CO
Thu Dec 27, 2012
It's really more a matter of timing. Interest is generally paid in arrears. A payment made in February is paying January interest. Therefore if you close on January 20th, your closing costs would include 11 days of interest (January) and your first payment would be due March 1, to pay February interest. Sorry, but you are not really getting "free" interest, just a matter of when it is collected (at closing or when you make your first mortgage payment). the closer you are to the end of the month, the sooner AFTER closing your first actual mortgage payment will be due.
You should, of course, verify this with your lender.
Best of luck and congratulations (in advance) on your home purchase!

Chuck Strauss
Your Castle Real Estate
0 votes
Nicci Hyatt, Agent, Denver, CO
Thu Dec 27, 2012
Kristi - as Ron noted below these are questions for your lender and the title company. THAT SAID, there's no such thing as a free day. Your mortgage company either captures your payment in your monthly or at closing (by charging upfront interest) - perhaps your seller is paying your closing costs and so it feels "free," but you'd be paying less for your house if you weren't asking for seller assistance in closing. Also, FHA is always due the 1st of the month and is paid in advance, not in arrears, so the period between your close date and "first" mortgage payment isn't a set # of days it is just the # of days out from the 2nd 1st of the month. Better to talk with your loan officer - if you were using less of your closing costs budget toward "free" days, maybe you could pay off your mortgage insurance upfront, THAT could be a much better long-term decision.
0 votes
Ron Thomas, Agent, Fresno, CA
Thu Dec 27, 2012
These are questions for your Title Company and your Lender:
We cannot possible answer them; but I'll try.

I doubt that any Bank will go 60 days on the first payment; I would bet that you would have to beg for 35-40 days, and base your request on when you get paid. Understand that no matter when it is due, you will be paying interest on it, increasing your Vig.
Your Lender should have given you your GFE, which should show everything. They must, BY LAW!

And your Title Company should have given you your HUD1, which shows everything else. You may ask your Escrow Officer to sit down and explain everything to you: They do that.

Note: If you CLOSE in January, you will be pre-paying 6 month's of Taxes, whereas, February drops to 5 month's worth.
0 votes
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