The first mortgage payment is usually due a full month after your closing date — on the first day of the month. When you make mortgage payments, you're paying for the previous month, not the current month.
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If you close on your new home late in a month, chances are your first mortgage payment will be due in just over 30 days. That's because mortgage payments made on the first of a month are actually paying for the previous 30 days.
Important: You are responsible for mortgage payments up until the day your home sale closes. Mortgage lenders require that all payments are up-to-date until the closing date, meaning you'll need to continue making regular monthly payments throughout the listing and selling process, even after accepting an offer.
Bottom Line
An end-of-the-month closing keeps a lid on the amount of interest you'll have to pay at closing but also means means your first full monthly mortgage payment comes sooner. An early-in-the-month closing flips that script; interest due at closing is higher but your first full monthly payment comes later.
Some buyers may be able to negotiate an immediate possession date. This means as soon as the transaction is closed and the deed is recorded, the buyer can move in. A few other common buyer possession dates may be 15 days, 30 days, 60 days, or even 90 days after closing, depending on how much time the seller needs.
To avoid paying interest and late fees, you'll need to pay your bill by the due date. But if you want to improve your credit score, the best time to make a payment is probably before your statement closing date, whenever your debt-to-credit ratio begins to climb too high.
Both buyers and sellers typically pay closing costs, and the amount can vary depending on several factors, including the price of the home, the sort of mortgage the buyer gets, which state the home is located in and more.
The reason your initial mortgage payment is higher than subsequent payments is for technical reasons – specifically because your mortgage starts at completion and in some cases your direct debit may not start immediately.
1 week out: Gather and prepare all the documentation, paperwork, and funds you'll need for your loan closing. You'll need to bring the funds to cover your down payment, closing costs and escrow items, typically in the form of a certified/cashier's check or a wire transfer.
A seller typically receives their money from the home sale 24 – 48 hours after closing. This timeline can be different depending on your state and whether the seller chooses to receive their money by cashier's check or wire transfer.
A dry closing is a type of real estate closing in which the entire closing requirements are fulfilled except for the disbursement of funds. A real estate closing is the completion of a transaction involving the sale or exchange of real estate.
Agents usually receive their commission after the home mortgage loan has been funded and the sale closes. Their brokerage receives a wire with the funds and the agent's portion of the commission is released to them shortly thereafter.
Your credit card payment due date is the day that you must pay at least the creditor's minimum amount (based on your overall balance). It's based on the closing date of your last billing cycle. The due date is at least 21 days after the closing date (remember, this is when the credit card statement was generated).
If you need to be occupying your home by a certain date to save on rent, it's a much better deal to close at the end of the previous month (for example, January 30) instead of the beginning of the current month (February 1).
Maintain these additional payments over an extended period of time and you'll likely eliminate several years from your term. A quick note here: there is no best day of the month to pay your mortgage.
Since mortgages are paid in arrears and on the first of the month, your first mortgage payment typically comes at the start of the new month after you've lived in your new home for 30 days. This means that if you close on your house on May 25, your first payment is due July 1.
Key takeaways. The traditional rule of thumb is that no more than 28 percent of your monthly gross income or 25 percent of your net income should go to your mortgage payment.
Most mortgage lenders won't collect less than a full month's payment. So, your first payment will likely cover the partial month from your completion date to month-end, plus the full following month. For example, if you complete on June 15th, your first payment will likely cover June 15th to July 31st.
On closing day, one of the first things you should do is pack for your move, if you haven't already. Depending on how long you've been in your current house and how many possessions you've accumulated, boxing everything up may be a Herculean task.
Government Assistance
For example, California has the CalHFA program available to qualified low-income buyers. The program provides grants and loans to eligible borrowers, and the money can either directly subsidize part of a down payment, or cover the entire thing, depending on certain factors.
Once all the papers are signed, you've secured your mortgage and the closing is officially complete, you'll receive the keys to the property. Be sure to store all of the documents you received during the closing in a safe place. You can also now change your address, meet your new neighbors and move in.
Benefits of Early Month Closings
Closing during the first weeks of the month offers certain advantages. For example, if you close on June 5, your first mortgage payment won't be due until August 1, giving you nearly two months before your first payment. Also, try to close on a Tuesday or Wednesday.
Make a credit card payment 15 days before the bill's due date. You might be told to make your minimum payment, or pay down at least half your bill, early. Make another payment three days before the due date. Then, pay the remainder of your bill—or whatever you can afford—before the due date to avoid interest charges.
Quick Answer. Typically, sellers receive their proceeds on the same day as closing, usually within a few hours after all documents have been signed and the buyer's funds have been received.