Closing on a home is the final stage in the home buying process, and once you have signed all of the necessary documentation and paid the closing costs, you can finally move into your new home. The transaction is considered complete on the closing date, and then you will begin making monthly mortgage payments soon after. If you have purchased a home recently, or are interested in buying a home and have questions regarding your mortgage payments in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, contact the loan specialists at Foundation Mortgage. We can help you better understand your monthly mortgage payments.
Monthly Mortgage Payment Guidelines
When taking out a mortgage to purchase a home, you must pay back the loan in monthly installments. Your very first mortgage payment will be due one month from the last day you closed on your home. The remaining mortgage payments will usually be due at the beginning of every month, however, many lenders will offer a grace period before imposing late fees. When closing on a home, you must pay closing costs, which do not include the amount of your mortgage, but do include the cost of private mortgage insurance and appraisal fees. Unlike rental fees, which are paid in advance, mortgage payments are made in arrears, which means that your first mortgage payment will not be due immediately after you close on your home. The first payment will be due a month after your closing date, for example, if you closed on October 1st, your mortgage payment would be due on November 1st.
When Is the Best Time to Close on a Home?
Your lender will usually require you to pay prepaid interest for the remaining days of the month that you closed. So if you close on a home towards the end of the month, you will pay less prepaid interest than if you were to close at the beginning of the month. For example, if you were to close on August 8th, you would owe interest from the 8th until the end of the month. However, if you closed on August 29th, you would only owe interest from the 29th to August 31st. Closing earlier in the month can be beneficial for some buyers because it could allow you more time to gather the funds needed for the first mortgage payment. For example, if you closed on May 4th, your first payment wouldn’t be due until July 1st.
Get Help Understanding Your Monthly Mortgage Payments
There are many factors to take into consideration when closing on a home and making mortgage payments. If you are a home buyer in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, Foundation Mortgage can work closely with you to determine your unique situation and help you make the best mortgage decisions. Contact us today for a consultation.
