It’s one of those questions I get all the time, especially from first-time homebuyers here in California. You’ve just signed what feels like a thousand documents, handed over your life savings for a down payment, and now you’re wondering: “When exactly do I need to start making those mortgage payments?” It’s a great question—and one that causes more confusion than you might expect.
The Standard Timeline for First Mortgage Payments
Here’s the short answer that surprises many of my clients: your first mortgage payment typically isn’t due until the first day of the second month after your closing date. Yeah, you read that right.
Let me break this down with a real example. Say you close on your new home in Pasadena (where Elena and I have lived for the past decade) on June 15th. Your first mortgage payment wouldn’t be due until August 1st. That gives you about six weeks before that first payment hits.
This isn’t some special California rule or lender generosity—it’s just how mortgage interest is calculated. And trust me, the lenders aren’t losing any money in this arrangement. Which brings me to…
Understanding Mortgage Interest and Prepaid Interest
The reason you don’t make a payment right away has to do with how mortgage interest works. Mortgage payments are made in arrears—meaning you’re paying for the previous month’s interest, not the upcoming month.
But here’s the catch—and it’s an important one: At closing, you’ll pay what’s called “prepaid interest” covering the period from your closing date through the end of that month.
Let’s go back to that June 15th closing example. At closing, you’d pay interest for June 15th through June 30th. Then your first full mortgage payment on August 1st would cover the interest for all of July, plus a portion toward your principal.
I remember when I bought my first home back in 2003 in Silver Lake. I closed on April 23rd and was thrilled about not having a payment due until June 1st. I thought I was getting some kind of special deal! My broker at the time—this old-school guy named Frank who’d been selling homes since the 70s—laughed and explained that I’d already paid for those final April days at closing. The light bulb went on.
What’s Included in Your First Mortgage Payment?
Your first mortgage payment—and all subsequent payments—typically includes:
- Principal (the amount that reduces your loan balance)
- Interest (the cost of borrowing the money)
- Property taxes (if you have an impound/escrow account)
- Homeowners insurance (again, if escrowed)
- Mortgage insurance (if applicable)
This is what lenders refer to as PITI: Principal, Interest, Taxes, and Insurance.
Now, one thing that’s changed since I started in this business is the prevalence of impound accounts in California. Back in the early 2000s, they weren’t as common for conventional loans with good down payments. Today, most of my clients end up with impound accounts regardless of their down payment size.
Calculating Your Exact First Payment Date
Here’s a simple way to figure out when your first payment is due:
- Take your closing date
- Skip the next full month
- Your payment is due on the 1st of the following month
Some examples I’ve seen with recent clients:
- Close on July 10 → First payment due September 1
- Close on August 31 → First payment due October 1
- Close on September 1 → First payment due November 1
That last example is interesting—even if you close on the very first day of a month, you still don’t make a payment until the beginning of the month after next. Though in that case, you’d pay almost a full month of prepaid interest at closing.
Common Misconceptions About First Mortgage Payments
Let me clear up some confusion I hear all the time from buyers—especially those purchasing in California’s high-priced markets where every dollar counts.
“I don’t have to make any payment at closing”
Not quite true. While your first regular mortgage payment comes later, you will pay that prepaid interest at closing. For some of my clients buying multimillion-dollar homes in places like Brentwood or Los Feliz, that prepaid interest can be a significant amount.
“I get to skip a month of payments”
This is the biggest misconception. You’re not skipping anything—you’re just paying differently. Between your prepaid interest at closing and your regular mortgage payments, every single day of interest is covered.
“The closing date doesn’t matter much”
Actually, your closing date can have a real financial impact! If you close at the end of the month (say, the 29th or 30th), you’ll pay very little in prepaid interest at closing. Close on the 1st, and you’re prepaying interest for almost the entire month.
I had clients last year who were flexible on their closing date for a home in Manhattan Beach. We intentionally scheduled closing for January 30th instead of February 2nd. This saved them nearly $7,000 in prepaid interest at closing—not a small amount!
California-Specific Considerations
While the basic payment timing is standard across the country, there are some California-specific things to keep in mind:
Property Tax Considerations
California has a somewhat unique property tax system with payments due in December and April (for the periods July-December and January-June, respectively). If you have an impound account, your lender will collect enough at closing to cover upcoming property taxes, which can add significantly to your closing costs.
I’ve found this catches many out-of-state buyers off guard—especially those coming from places with monthly property tax payments built into their mortgage from day one.
High-Value Loan Impacts
Because of our state’s high home prices, many California buyers end up with jumbo loans. These often have slightly different payment structures or requirements. Some jumbo lenders require larger initial escrow deposits or have different payment processing systems.
Between you and me, I’ve noticed some of the smaller jumbo lenders can be a bit more… let’s say “administratively challenged” when it comes to setting up first payments correctly. Double-check everything they send you.
How to Prepare for Your First Mortgage Payment
Based on my two decades helping California homebuyers, here’s my advice for handling that first payment:
- Get clear instructions at closing. Your loan officer or escrow agent should provide written information about when and how to make your first payment.
- Set up auto-pay if available. Most lenders offer discounts (typically 0.25% off your interest rate) if you set up automatic payments. Do this as soon as possible.
- Create calendar reminders. Even with auto-pay, I recommend setting reminders to verify the payment went through.
- Keep your closing documents handy. They contain all the information about your loan servicer, loan number, and payment amount.
- Budget appropriately. Remember that “skipped” month isn’t really skipped—plan your cash flow accordingly.
Elena, who handles our family finances, has a great system: she sets up a separate savings account for mortgage payments and transfers the payment amount on closing day, then again on the first of each month. This way, the money is always set aside.
What If Your Loan Gets Sold?
Here’s something that happens quite frequently in California’s competitive mortgage market: your loan might be sold to another servicer shortly after closing.
I had clients who closed on a beautiful Spanish-style home in Eagle Rock last year. They made their first payment to the original lender, and literally the next day, received notice that their loan had been sold to a completely different company!
If this happens to you:
- You should receive written notice from both the old and new servicers
- There’s typically a grace period where payments to either servicer are credited properly
- Your loan terms cannot change when the loan is sold
- Set up your new payment methods promptly
What About Biweekly Payment Options?
Once you get past that first payment, you might hear about biweekly payment options. These can be great for some California homeowners looking to pay off their loans faster.
With biweekly payments, you pay half your mortgage amount every two weeks, resulting in 26 half-payments per year—equivalent to 13 monthly payments instead of 12. On a typical 30-year California mortgage, this can shave off about 4-5 years and save tens of thousands in interest.
Just make sure any biweekly program you enroll in is legitimate. Your lender might offer an official program, or you can essentially create your own by making additional principal payments.
My Personal Advice After 20+ Years in California Real Estate
After helping hundreds of buyers through their first mortgage payments since I started back in 2003, here’s what I tell all my clients:
Don’t count on that “skipped” first month as extra spending money. The California housing market is expensive enough without starting your homeownership journey behind on your financial planning.
Instead, I suggest using that time before your first payment to:
- Build up your emergency fund
- Address any immediate home needs or repairs
- Set up a dedicated home maintenance account (you’ll need it!)
One of my first clients, who bought a starter home in Atwater Village years ago, used that period before the first payment to build a three-month mortgage payment buffer in their savings account. Twenty years later, they’ve never missed a payment, even through job changes and economic downturns.
Remember, successful homeownership in California isn’t just about making that first payment—it’s about setting yourself up for sustainable, long-term financial stability in what remains one of the most expensive housing markets in the country.
And hey, when that first mortgage statement arrives, take a moment to celebrate! Despite all the paperwork and waiting and stress, you’ve achieved something remarkable—homeownership in the Golden State.
