When To Expect Your Mortgage Payments To Begin
The final stage of buying a new home is closing, and when you have paid for the closing costs and signed all of the necessary paperwork, you can move into your new home. The loan begins and the sale is considered finalized on the date you close, so a borrower can expect mortgage payments to become due soon after. If you are interested in buying a home in San Luis Obispo, California, and have questions about your mortgage costs, Central Coast Lending with Mike can help. Read on to learn more about when you can expect your mortgage payments to start.
The Basics Behind Monthly Mortgage Payments
When you take out a loan to purchase a home, you are required to pay back the mortgage in monthly installments. One month from the last day that you closed on your home, your first mortgage payment will become due. Your mortgage payment will typically be due at the beginning of every month, with most lenders offering a short grace period before charging a late fee. When you close on your home, you will be responsible for closing costs, which cover everything except the cost of your actual mortgage, including the appraisal fee, private mortgage insurance, etc. Mortgage payments differ from rental payments because they are paid in arrears, which means that you do not have to make your mortgage payment immediately, and that your initial mortgage payment will be due one month after the day that you closed on your home. For example, if your closing date occurred in May, you would not need to make your first mortgage payment until June.
Choosing The Best Time To Close On a Home
Your lender will typically require you to make a prepaid interest payment for the remaining days of the month that you closed on your home. Thus, if you close on your home towards the beginning of the month, you will have to make a higher prepaid interest fee, but if you are able to close closer to the end of the month, the prepaid amount will be less expensive. Closing at the beginning of the month, however, could be advantageous because it would allow a borrower more time to accumulate the funding for their first mortgage payment. For instance, if you closed on a home September 3rd, your first payment would be due October 1st, so you would have that time to save up for the payment.
Assistance With Your Mortgage Questions
When you become a homeowner, it is important to consider the different costs that are associated with the purchase. If you are interested in buying a home in San Luis Obispo, California, and have questions about your mortgage, contact Central Coast Lending with Mike today for a consultation.
