Managing Your Monthly Payment


Where Your Monthly Payment Goes


Each month, you’ll make a monthly payment to your lender that will go toward paying back the amount you borrowed (commonly called the principal), plus interest. Your monthly payment may also include mortgage insurance.


Your mortgage statements will show how your payment is broken up. Initially, the bulk of your payment will go toward paying down the interest on the loan, but over time, more of your payment will go to paying down the principal balance.


If you have an escrow account on your loan, part of your payment will go there. The amount of money that’s added to your payment for escrow depends on the amount of your taxes and insurance premiums. Your lender will analyze your account each year to make sure they’re collecting the appropriate amount of money, and they’ll adjust your payment if they’re collecting too little or too much.


When will my first mortgage payment be due?


Your first mortgage payment won’t be due for up to two months after closing. If you close on June 9, for example, you’ll pay per diem interest at closing to cover the period between June 9 and June 30. Then, your payment for the month of July will be due on August 1.

How to Handle a Missed Mortgage Payment


If you’re a few days late on your mortgage payment, you likely won’t have to pay a penalty. Most lenders have a grace period – usually around two weeks – when you can make your mortgage payment without an additional late fee. If you fail to pay before the grace period expires, however, you’ll likely pay a penalty. Plus, a late payment will lower your credit score.


What should I do if I’m going to miss a mortgage payment?


Contact your lender right away if you’re going to miss a mortgage payment. Missing multiple payments can hurt your credit score, but it can also lead you to default on the loan – and you could lose your house. If you’re experiencing a hardship, your lender may be able to create a payment plan to help you get back on track.