A temporary buydown provides payment relief from higher interest rates by allowing a buyer to make a reduced payment based upon a lower interest rate during the first few years of a mortgage term. Click Here for more information on Temporary buydowns and how they work.

Since mortgages are paid in arrears, meaning you always pay for interest that accrued during the prior month, the first payment is typically due after you have held the mortgage for one full calendar month. For example, if you close on the 25th of January, your closing costs include prepaid interest for January 25th – January 31st. Interest then accrues during February which is paid with the first payment due on March 1st. Payments are not considered late until the 16th of the month.

Only full mortgage payments can be credited to your account, so many servicers will not accept partial payments. Those that do will hold the funds in a “suspense” account and wait until the balance of the payment is received before posting the payment to the account. Click Here for our blog post and more information on partial payments.

Bi-weekly payments require half a mortgage payment to be made every two weeks resulting in 26 half-payments, or 13 full payments, over the calendar year. The prepayment of one extra principal and interest payment results in paying down the mortgage balance faster and provides interest savings by shortening the term of the loan. Click Here for more information on bi-weekly payments.