General Question

[ReBuildingAgn]

After closing, typically when is the first payment due?

[Lel]

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@ReBuildingAgn wrote:

After closing, typically when is the first payment due?

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For us, we closed in early March and the first payment was due on May 1.  The monthly payments reflect the accrued interest and principal due for the prior month.  At the time of closing, we prepaid interest for the remainder of March; hence, no payment was due on April 1.  I think this is the standard operating procedure for mortgages.

[llecs]

Ditto. We closed on January 31 and payment was due March 1. I remember asking them if a payment was due the day after closing.

[ReBuildingAgn]

Thanks Guys! Do you typically pay taxes and insurance for the year at closing, so for the remainder of the year your payment is the principal and interest?

[JM-AM]

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@ReBuildingAgn wrote:

Thanks Guys! Do you typically pay taxes and insurance for the year at closing, so for the remainder of the year your payment is the principal and interest?

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Taxes and Insurance are put into your escrow account and paid once they are due. You would be paying into your escrow account monthly through-out the entire year and once the payments are due they will be automatically taken out of your escrow account for payment. Both can be paid directly from you and in which case you would receive a refund from your escrow account yearly. 

[Lel]

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@ReBuildingAgn wrote:

Thanks Guys! Do you typically pay taxes and insurance for the year at closing, so for the remainder of the year your payment is the principal and interest?

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Every contract is different.  For us, we paid for a full year of hazard insurance at the time of closing, as well as some property taxes that were paid by the previous owner that we had to partially cover due to the change in ownership.  But we didn't have an escrow account established - it's up to us to make sure that we put enough aside each year to pay the taxes and insurance.  Our payments to the bank are only P&I.

[frogfan12]

It depends on what time of the month you close. I closed at the end of August and my first payment was due October 1.

[ReBuildingAgn]

So I just spoke with the Lender to get preliminary info I need for applying. Once I prequalify I have to send her all the paper work (paystubs, w2's, etc). They also need 2 months bank statements; exactly what are they looking for in my statements? Average amount in account (I usually play it close bc I've been steadily paying off debts)? Will low average balances keep my loan from being approved?

[namvet]

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@ReBuildingAgn wrote:

So I just spoke with the Lender to get preliminary info I need for applying. Once I prequalify I have to send her all the paper work (paystubs, w2's, etc). They also need 2 months bank statements; exactly what are they looking for in my statements? Average amount in account (I usually play it close bc I've been steadily paying off debts)? Will low average balances keep my loan from being approved?   The lender wants to see your last 2 months bank statements to see if you have any deposits that need a paper trail.  You will need to have proof of where these deposits came from.  Normally the underwriter is looking for possible loan deposits etc. 

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[ReBuildingAgn]

Ohh ok. I was worried that I would need to start maintaining a certain balance and start freaking out if I don't. I once heard of a credit union denying someone a loan because they ate out too much. I don't eat out often, but I didn't want to be afraid everytime I swipe my card to take my kid to Chick Fil A.