is it true that after my closing day I'm not going to have to pay my mortgage the first month?

Question

a friend told me that if I close on June 29 I'm not going to have to pay mortgage for July, instead my payments will start in august. is that true?

Answer 1

yes. your first payment is included in your closing costs (prepaid mortgage interest). if you close the 29th (or even the 15th) you take the number of days left in the month and pro-rate your interest. when you make a loan payment it works the opposite of rent. instead of paying ahead of time, you pay what is called interest in arrears... basically your august payment pays for july... in closing, you pay your july payment through pro-rated interest from june. hope that helps.

Answer 2

Yes that is true. Mortgages are set up to bepaid "in arrears". This means that you pay for the previous month. (That way, at the end of your mortgage loan, you are not over-paying the bank and causing them to have to refund your money).
If you close on the 29th, your first payment is not until after you have lived in your home for the first full month (July). Then you pay in August.
Clear as mud, no? LOL.
Congrats on you house! :-)

Answer 3

most all closings that take place in a title office are prepaid for 45 days.
you are paying it, but its not figured as a payment, its prepaid closing like your insurance, interest and taxes. your 1st payment will come due in about 45 days so you have a little grace period to make more money and plan for the first of many pymts.

Answer 4

It depends on your bank, and also weather the first months payment was payed at closing.

Answer 5

Yes, but there is no free lunch.

It's included in your closing costs.

Terry Smith

Http://www.Welcome2Arizona.com

Answer 6

Should be, but make sure before you decide not to pay.

Answer 7

Yes that is most likely correct.