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Financing, Mortgages and Insurance What options are best for you and your situation?

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Old 2012-06-16, 06:12 PM
thefinneys thefinneys is offline
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Default How soon do mortgage payments generally start?

I'm confused with what we will have to pay and when re our mortgage when we take possession of our house in September. I have called our broker but she's away so maybe someone here can offer an opinion although I realise it may be different according to different lenders.

I've read a lot of conflicting things about this, some that say if you're closing mid-month you will pay for the remaining month up front when you close and others say that you normally pay in advance but wait a month. So if we close 20 September we would pay on 1st October for October and the 2 weeks of September...but then I think I heard, or maybe even dreamt, that in Canada you get two weeks grace which I don't think would be true...it would be great though! or maybe it was that if you take possession mid-month you only pay interest on the remaining month and not the capital?

Can anyone offer any advice
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Old 2012-06-16, 08:08 PM
Natasha Natasha is offline
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It depends how your payments are set up. If you have bi-weekly payments, they will start two weeks after closing. You can choose any day of the week , for instance the day after your paycheck. If you have monthly payments, they will start one month after closing. I think.
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Old 2012-06-16, 08:34 PM
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Zorro Zorro is offline
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Natasha is correct...we close on June 26, and since we're doing bi-weekly, our 1st mortgage payment doesn't come out until July 5 (our 1st paycheck of July). As far as 'paying' for the last few days of June, it's worked into your payments. You don't need to pay that at closing. What you need to pay at closing is for the property tax that the builder has pre-paid. It's generally not very much.

If you do monthly than yes it would be one month later, so in our case July 1.

Hope this helps!
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Old 2012-06-16, 09:02 PM
Almost_Home Almost_Home is offline
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We closed both of our homes at the end of the month - on the 30th and the 27th. Our first payment for both was two weeks after but it was only an interest payment so it was about half of a full mortgage payment. The next payment two weeks later was a full payment. So we kinda got a months grace till our first FULL payment came out.
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Old 2012-06-16, 10:51 PM
foxborough foxborough is offline
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Interest will start on closing day. Your first payment will depend upon your payment schedule. Weekly and bi-weekly payments will start sooner than monthly.

Make sure that whenever someone tells you there is a "grace" period, make sure that they are talking about a payment or interest. There is a difference.
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Old 2012-06-24, 05:55 PM
Tara Wilkins Tara Wilkins is offline
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When you sign off on your mortgage with your Broker/Bank, you will indicate which days you want your mortgage to come out on. Sometimes you will get a 30 day grace period with no payments, and interest adjustment date, and a conversion date. You can ask for your payments to start right away, or pay interest only for the first 30 days. This will also extend your term - so if you clost September 1st, but your first payment is not until October 1st, 2012 your renewal date might be scheduled for October 1st, 2017.

Talk to you broker about what you have signed off on.

Tara Wilkins
Mortgage Specialist
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