Closing is the last step when purchasing a property, and once you have finished all the required paperwork and paid for closing costs, you can begin to settle into your new home. Since the sale is finalized on your closing date, your mortgage will officially begin, and you should expect your subsequent mortgage payments to become due soon. If you are ready to buy a home in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, and want to better understand your mortgage costs, Foundation Mortgage is here to help. Read on to learn more about when you can expect your monthly mortgage payments to begin.
Monthly Mortgage Payments – Essential Information
When you close on your home, you will have to pay for closing costs, which covers expenses that aren’t included in your mortgage, such as mortgage insurance, home appraisal fees, etc. Then, you will be required to pay back your mortgage in monthly installments if you take out a loan to help you finance a property. The first mortgage payment typically becomes due a month from the final day that you closed on the home, because unlike rental payments, mortgage payments are paid in arrears, meaning that you won’t have to make your first payment immediately, rather, the payment will become due one month after the date you closed on the home. For instance, if you closed on a home in August, your first payment would become due the following month in September. Most mortgage payments are due at the beginning of each month, however some lenders do offer a grace period of a few days before charging a late fee.
When Is The Best Time To Close On a Home?
Your lender will usually require you to make a prepaid interest payment on the remaining days of the month that you closed on your property. Therefore, if you close on the home near the end of the month, the prepaid interest cost will be lower than if you closed towards the beginning of the month, which would be more expensive. If you do close at the beginning of the month, however, it could be more beneficial depending on your situation because it could allow you more time to save the funds to afford the first mortgage payment. For instance, if you were to close on April 5th, your payment would be due May 1st, giving you additional time to save up for the first payment.
Get Answers To Your Mortgage Questions
It is important to consider all of the associated costs that you will be responsible for so that you are well prepared when buying a home. If you are interested in purchasing a home in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, contact Foundation Mortgage today for a consultation.