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When the time comes buy a house, many consumers are using mortgages to fulfill their home ownership dreams. Once you take out a mortgage, you will make monthly payments to your lender until you pay off the entire loan (including interest).
If you are facing the first debt payment, continue reading to know when it is due and the usual way to pay.
Credible helps you compare mortgage rates from multiple lenders.
When is your first loan due?
Generally, your first payment is due approximately 30 days after your closing date. The first payment usually occurs at the beginning of the second month, after the closing of the loan.
For example, if you close on your home closer to the end of the month, like October 28th, you likely won’t owe anything for the first full month (in this case, November). It should be paid at the beginning of December.
There is a common misconception that you pay off your current mortgage with the first payment, but this is not true; you pay the month in advance. You can’t skip a loan payment by closing at the beginning of the month.
How to pay off your first loan
You can pay off your loan in different ways, such as:
- Pay online. especially creditor allows you to make digital payments through an online account.
- Sign up for autopay. When you sign up for autopay with a lender, you ensure that payments are deducted from your account on time.
- Pay by phone. It may also be possible to pay over the phone by calling your lender and giving them your information, but not all lenders offer this option.
- Send a check. Sending a check is often a payment option available to lenders, but it’s generally not the safest or fastest option.
How much is your down payment?
How much your down payment is depends on a few factors, such as:
- Payment Schedule – Some lenders allow you to bi-weekly payments — half of your weekly mortgage payment — instead of one monthly payment. By making 26 payments per week, you make one additional payment per month for a year. This can help you pay off your debt faster and save on interest.
- Your loan amount – No matter how much you borrow from your lender, the size of your mortgage will automatically be affected. A larger loan amount means a higher monthly payment.
- Interest rate – Loans come with fixed or variable interest rates. A fixed interest rate stays the same for the life of the loan, but a variable interest rate can change over time. If you have a variable interest rate, your first payment will depend on the current interest rate. Try to to negotiate a better loan rate before securing your loan.
Reasons for your mortgage payment
Debt payments usually consist of four different components:
- Director – This is the money you borrowed that needs to be paid back to the lender.
- interest — Interest is the amount the lender pays you to borrow money.
- tax — You need to pay taxes on your property. The amount you pay depends on your state and county and is generally deposited into your loan payment and held in an escrow account until your tax bill arrives.
- insurance — This includes paying your closing costs as well as insurance premiums for your homeowner’s insurance, private insurance (PMI), flood insurance and legal insurance.
WHAT YOU SHOULD KNOW ABOUT LAND PROGRESS
What happens if you default on a loan?
If you can’t pay a loan, the lender may offer a one-time payment period before defaulting. But it’s not a guarantee, so it’s always a good idea to check in advance with your lender and make your payments on time. You should have information explaining how much late fees are for non-payment of your newsletter.
If you don’t pay a lot, it can hurt your credit score, because lenders have the option of reporting late payments to the credit bureaus when they’re more than 30 days late.
Even worse, missing multiple payments can lead to foreclosure. After three consecutive months of non-payment, the lender can decide to proceed with foreclosure as soon as 30 days later, or four months after you became delinquent.
You can easily compare loan rates from multiple lenders Your credit score is not affected when you use Credible.