The confetti has settled. The documents are signed. The loan is funded. Whether you just bought a home or refinanced the one you're in, congratulations — the hard part is over.
But here's the thing nobody mentions on closing day: you now have a mortgage. It's going to be part of your life for a while, and a surprising number of questions tend to pop up in the weeks, months, and years after funding. Things like "who do I even pay?" and "why did my payment just change?" and "can I make this thing go away faster?"
We put together this guide to answer every post-funding question we've ever gotten — and a few you haven't thought of yet. Bookmark this one. You'll probably come back to it.
Your First Payment
When is my first mortgage payment due?
Not as soon as you think. Your first payment is typically due on the first of the month after a full month has passed from your closing date. So if you close on March 15th, your first payment is due May 1st. If you close on March 1st, your first payment is still due May 1st.
That gap isn't a gift — it's because mortgage interest is paid in arrears, meaning each monthly payment covers the interest for the previous month. The interest from your closing date through the end of that month was already collected at closing as "prepaid interest." So you're not skipping a payment, you're just on a different schedule than you might expect.
Where do I send my payment?
Your loan servicer will send you a welcome letter with payment instructions, including how to set up autopay. More on who your servicer is in a moment — because that might surprise you too.
Should I set up autopay?
Strongly recommended. It eliminates the risk of a late payment, and some servicers offer a small interest rate discount for enrolling. Even if there's no discount, the peace of mind is worth it. One less thing to think about every month.
Your Loan Servicer (and Why It Might Change)
What's a loan servicer?
Your loan servicer is the company that manages your mortgage on a day-to-day basis. They collect your monthly payments, manage your escrow account (if you have one), send you tax documents, and handle customer service. Think of them as the administrative layer between you and the investor who owns your loan.
Wait — Ralo isn't my servicer?
Ralo is a mortgage broker. We help you compare competitive pricing, originate your loan, and get you through closing. Once the loan is funded, servicing is handled by the lender or a dedicated servicing company. You'll receive a welcome package from your servicer with everything you need — account number, payment portal, contact information.
Can my loan get sold or transferred?
Yes, and it's extremely common. Don't panic when you get a letter saying your loan has been transferred to a new servicer. Your loan terms — rate, balance, payment amount — do not change. The only thing that changes is where you send your payment and who you reach out to with questions. By law, both your old and new servicer must notify you, and there's a 60-day grace period during the transition where a payment sent to the old servicer can't be counted as late.
It can feel unsettling the first time it happens, but it's a completely normal part of how the mortgage industry works. Your loan is the same loan. Nothing about your deal changed.
Escrow: Does This Apply to You?
Not every Ralo borrower has an escrow account. If your loan-to-value ratio is 80% or below — meaning you put at least 20% down or have at least 20% equity — there's a good chance you don't have one, and you're responsible for paying your property taxes and homeowner's insurance directly. If that's you, feel free to skip this section (though you may still want to skim it so you understand what escrow is if it ever comes up).
If you do have an escrow account, here's what you need to know.
What is an escrow account?
An escrow account is a holding account managed by your loan servicer that pays your property taxes and homeowner's insurance on your behalf. Each month, a portion of your mortgage payment goes into this account, and when your tax and insurance bills come due, the servicer pays them from the funds that have accumulated.
The upside: you don't have to come up with large lump sums for taxes and insurance on your own. It's forced budgeting, and honestly, most people appreciate it once they understand how it works.
Why did my monthly payment change?
If you have escrow, this is the most likely reason. Your interest rate and the principal portion of your payment are fixed (assuming you have a fixed-rate loan). But your property taxes and homeowner's insurance premiums can change from year to year. When they do, your servicer adjusts your escrow payment to match — which changes your total monthly payment.
Your servicer performs an escrow analysis once a year to make sure the account has enough to cover upcoming bills. If there's a shortage (taxes went up, insurance got more expensive), your monthly payment increases to make up the difference. If there's a surplus, you may get a refund or see a slight decrease.
If you don't have escrow and your monthly payment changed, reach out to your servicer — there may be a different explanation, and we want to make sure you understand what's going on.
Can I get rid of my escrow account?
Possibly. Some loan programs require escrow regardless of your equity position. But if your loan allows it, you may be able to request an escrow waiver and pay your taxes and insurance directly. Just know that managing those payments becomes your responsibility — and missing a property tax payment or letting your insurance lapse can create serious problems.
Making Extra Payments and Paying Down Your Loan Faster
Can I make extra payments toward my principal?
Absolutely. Ralo does not originate loans with prepayment penalties — ever. That means you can pay extra whenot typically you want, in any amount, without being charged for the privilege. This is your loan and your money, and you should be able to pay it down as fast as you'd like.
How do I make sure the extra money goes to principal?
This is important. If you just send extra money without specifying where it should go, your servicer might apply it to next month's payment instead — which means part of it goes to interest, not principal. That defeats the purpose.
When making an extra payment, explicitly designate it as a principal-only payment. Most servicer portals have an option for this. If you're mailing a check, write "apply to principal only" in the memo line. If you're unsure, reach out to your servicer and ask how to direct a payment to principal. Then follow up to confirm it was applied correctly. Trust but verify.
How much does extra principal actually save me?
More than you'd think. Even small additional payments — an extra $100 or $200 a month — can shave years off your loan and save you tens of thousands of dollars in interest over the life of the mortgage. The earlier you start making extra payments, the bigger the impact, because you're reducing the balance that interest is calculated on.
What about biweekly payments?
Biweekly payments are a popular hack. Instead of making one monthly payment, you pay half your monthly amount every two weeks. Because there are 52 weeks in a year, you end up making 26 half-payments — which equals 13 full monthly payments instead of 12. That extra payment each year goes straight to principal and can take years off your loan without dramatically changing your monthly budget.
Some servicers offer biweekly payment plans directly. Others don't, but you can achieve the same effect by dividing your monthly payment by 12 and adding that amount to each payment as extra principal. Same math, different method.
Can I pay off my mortgage early in one lump sum?
Yes. If you come into money and want to pay off your mortgage entirely, you'll need to request a payoff statement from your servicer. This document shows the exact amount required to pay off the loan on a specific date, including any accrued interest. Don't just send what you think you owe — request the official payoff amount so the loan closes cleanly.
Private Mortgage Insurance (PMI)
What is PMI and why do I have it?
Private mortgage insurance is an extra monthly cost that's added to your payment when your down payment is less than 20% of the home's value. It protects the lender (not you) in case you default on the loan. It's not permanent — it's designed to go away once you've built enough equity.
PMI typically costs between 0.5% and 1% of your loan amount per year, depending on your credit score and down payment. On a $400,000 loan, that's roughly $165 to $330 per month. It's not a small number, which is why getting rid of it as soon as possible is worth paying attention to.
When can I ask for PMI to be removed?
You can request PMI removal once your loan balance reaches 80% of your home's original value — meaning you've hit 20% equity based on the original purchase price or appraised value at the time of the loan, whichever is lower.
To request removal, reach out to your servicer in writing. You'll generally need to be current on your payments with a good payment history, and the servicer may require a new appraisal at your expense to confirm the property value. Some servicers accept a broker price opinion instead, which is less expensive.
When does PMI automatically go away?
Even if you not typically request removal, PMI must automatically terminate when your loan balance is scheduled to reach 78% of the original value — based on your original amortization schedule, not extra payments. It also must terminate at the midpoint of your loan term (for a 30-year loan, that's year 15), regardless of your balance.
Here's the thing: the automatic termination at 78% is based on your scheduled payments, not reality. If you've been making extra principal payments, you may reach 80% equity long before the automatic trigger. That's why requesting removal proactively at 80% can save you months or even years of unnecessary PMI payments. Don't just wait for it to fall off — take action once you're eligible.
What if my home has gone up in value?
If your home has appreciated significantly, you may have 20% equity even if you haven't paid down your balance that much. Many servicers will consider current market value for PMI removal, but they'll typically require a new appraisal to prove it. If you believe your home is worth meaningfully more than when you bought it, it's worth exploring. The cost of an appraisal could pay for itself within a couple of months of eliminated PMI payments.
Does PMI apply to refinances?
If your refinance loan-to-value ratio is above 80%, yes — PMI will apply to the new loan as well. This is one of the reasons Ralo offers refinance structures that keep your balance at or below 80% of your home's value. We think about these things so you don't get surprised by them.
Property Taxes
Who pays my property taxes now?
If you have an escrow account, your servicer has it covered. They collect a portion each month as part of your mortgage payment and pay the bill when it comes due. You don't need to do anything.
If you don't have escrow, you're responsible for paying your property taxes directly to your county or municipality. Mark those due dates on your calendar — missing a property tax payment can result in penalties, interest, and in extreme cases, a lien on your home.
What if my property taxes go up?
They probably will at some point. Property tax rates and assessed values change over time. If your taxes increase, your escrow payment will be adjusted at your next annual escrow analysis, which means your total monthly mortgage payment goes up. It's not the lender raising your payment — it's your local government raising your taxes, and the escrow account adjusting accordingly.
What's a homestead exemption?
Many states offer a homestead exemption that reduces the taxable value of your primary residence, which lowers your annual property tax bill. The rules and savings vary by state — some are modest, some are quite significant. If you just purchased a home, check with your county assessor's office to make sure you've applied for any exemptions you're eligible for. It takes five minutes and can save you real money every year. Your mortgage contact at Ralo can also point you in the right direction for your specific state.
Homeowner's Insurance
Can I change my insurance provider after closing?
Yes, anytime. Your homeowner's insurance policy is yours — you're not locked into the provider you started with. If you find a lower rate or want different coverage, you can switch. Just make sure there's no gap in coverage (your lender requires continuous insurance), and notify your servicer so they update the escrow payment if applicable.
What happens if I let my insurance lapse?
Don't. If your homeowner's insurance lapses, your servicer will purchase a policy on your behalf — called force-placed insurance — and charge you for it. Force-placed insurance is significantly more expensive than a normal policy and provides minimal coverage. It exists to protect the lender's interest in the property, not yours. Avoid this by keeping your policy active and paying your premiums on time.
Tax Time
What's a 1098 form?
Every January, your loan servicer will send you a Form 1098, which shows how much mortgage interest you paid during the previous year. You'll use this when filing your taxes — mortgage interest is tax-deductible if you itemize your deductions.
Can I deduct my mortgage interest?
For most homeowners, yes — mortgage interest is generally tax-deductible if you itemize your deductions, subject to limits that depend on your loan amount and filing status. The specific rules and thresholds can change as tax law evolves, so it's worth checking with a tax professional to understand what applies to your situation. We're mortgage experts, not tax advisors, so we'll stay in our lane on this one — but we want you to know the benefit exists.
What about property tax deductions?
Property taxes are also generally deductible, though there are caps on how much you can deduct for state and local taxes combined. These limits can shift with changes in tax law, so again — a tax professional is the right person to give you current numbers. Your property tax payments will show up on your 1098 or in your escrow account statements (if you have escrow).
My loan was transferred mid-year. Will I get two 1098 forms?
Possibly. If your loan was sold or your servicer changed during the calendar year, you may receive a 1098 from each servicer covering their respective periods. Combined, they'll reflect your full year of interest payments.
If Things Get Tight
What happens if I miss a payment?
Life happens. If you miss a payment, most loans have a grace period — typically 15 days — before a late fee is charged. The late fee is usually around 4-5% of your monthly principal and interest payment. A single missed payment won't immediately affect your credit. Once a payment is 30 or more days late, it can be reported to the credit bureaus and that can impact your credit score significantly.
If you know you're going to have trouble making a payment, reach out to your servicer before you miss it. They may have options available — forbearance (temporarily pausing or reducing payments), repayment plans, or loan modification. Servicers would rather work with you than chase you. Early communication gives you the most options.
What is forbearance?
Forbearance is a temporary agreement between you and your servicer to pause or reduce your mortgage payments for a specific period — usually during a financial hardship like job loss, illness, or a natural disaster. It's not forgiveness (you still owe the money), but it gives you breathing room to get back on your feet. The missed payments are typically repaid through a repayment plan, added to the end of your loan, or addressed through a loan modification.
Will Ralo help if I'm struggling?
We care about how things turn out for you long after closing. If you're facing financial difficulty, reach out to us. We can't change your servicer's policies, but we can help you understand your options, point you to the right resources, and make sure you're not navigating it alone.
Building and Using Your Equity
What is equity?
Equity is the difference between what your home is worth and what you owe on it. If your home is worth $500,000 and your mortgage balance is $350,000, you have $150,000 in equity. Equity grows over time as you pay down your loan and as your home appreciates in value.
What can I do with my equity?
Several things. You can tap into it through a home equity loan (a second mortgage with a fixed amount and fixed rate), a home equity line of credit, also known as a HELOC (a revolving line of credit you draw from as needed), or a cash-out refinance (replacing your current mortgage with a larger one and pocketing the difference).
Each option has trade-offs. Home equity loans give you a lump sum at a fixed rate. HELOCs offer flexibility but usually have variable rates. Cash-out refinances replace your entire mortgage, which means your primary rate and terms change too. Your Ralo mortgage contact can help you evaluate which option makes sense based on what you're trying to accomplish.
What is a loan recast?
A recast is a lesser-known option that can be useful if you come into a chunk of money — a bonus, inheritance, or proceeds from selling another property. You make a large lump-sum payment toward your principal, and then your servicer recalculates your monthly payment based on the lower balance, keeping your existing interest rate and remaining loan term.
The result: a lower monthly payment without refinancing. Not all loans or servicers offer recasting, and there's usually a small processing fee, but it's worth asking about if you have a large sum you'd like to apply to your mortgage.
Selling Your Home
Can I sell my home before the mortgage is paid off?
Yes. When you sell, the proceeds from the sale first go to pay off your remaining mortgage balance (plus any accrued interest and fees). Whatever is left over is yours. If your home has appreciated in value, the leftover amount could be substantial — that's your equity being realized as actual money.
Your title company handles the payoff and distribution of funds at closing, just like it did when you originally purchased or refinanced.
What if I owe more than the home is worth?
This is called being "underwater" and it means you don't have enough equity to cover your remaining balance through a sale. If you find yourself in this situation, reach out to your servicer to discuss your options. In some cases, a short sale (where the lender agrees to accept less than what's owed) may be possible. This is a difficult situation, but there are paths forward — and the earlier you address it, the more options you'll have.
A Few More Things Worth Knowing
Can someone else take over my mortgage?
This is called a loan assumption, and whether it's possible depends on your loan type. Government-backed loans (FHA, VA, USDA) are generally assumable, meaning a qualified buyer can take over your mortgage at your existing interest rate. Conventional loans typically are not assumable. If you're in a situation where this might be relevant — selling your home in a high-rate environment when you locked in a low rate, for example — it's worth exploring. Reach out to your servicer to find out if your loan qualifies.
I got a letter offering to "save" me money. Is it legit?
After closing, you will be bombarded with mail from companies you've not typically heard of offering to refinance your mortgage, sell you additional insurance, set up biweekly payments for a fee, or provide some other service that sounds urgent and important. Most of these are marketing solicitations, not communications from your actual lender or servicer.
Some of them are designed to look like official documents. They're not. If you're ever unsure, reach out to your mortgage professional at Ralo or your servicer directly. We'll tell you whether something is real or junk mail — and it's almost often junk mail.
How do I know if refinancing again makes sense?
Markets change. Your financial situation changes. There may come a time when refinancing into a new rate or term makes sense again. A general rule of thumb: if you can lower your rate by at least 0.5% to 0.75%, the savings may justify the closing costs — but it depends on how long you plan to stay in the home and the specifics of your loan. When that time comes, you know where to find us.
Ralo Is Still Here
Closing day isn't the end of our relationship — it's the beginning of a different kind of support. We don't disappear after funding and hope you figure it out. You have questions six months from now about PMI removal? Reach out. You're confused by a letter from your servicer two years from now? Reach out. You're thinking about buying an investment property down the road? Definitely reach out.
We got into this business because we believe borrowers deserve clearer guidance — not just during the loan process, but for as long as they're homeowners. Your home is likely the most valuable thing you own. We want to make sure you often feel confident about the mortgage attached to it.
Have a post-funding question we didn't cover? Reach out to your Ralo mortgage professional. We're here for the long haul — not just the transaction.
