Interest accrues on a mortgage from the day the loan is funded. For instance, if you refinance your home and your closing is today, 10/17/2004 and it's your primary residence, you have a three day right to cancel. As such your loan will fund on Thursday 10/21/2004. Even though you signed the documents on 10/17, the interest doesn't start accruing until 10/21. However, be aware that if you're paying off an old mortgage, the interest on that is still being charged until it is paid off on or about 10/22.

Interest begins accruing the day that the lender's money is used. That is on the day the check or wired funds are good. That could be the same day on a purchase or 3-5 days after closing on a refinance. First mortgages are almost always simple interest and are almost always due on the 1st of the month. The odd days interest from the time you close until the 1st are handled at closing. When you make a payment, you are paying the interest for the previous month. When you pay off the loan early, as in a refinance, you might have to pay off more interest than you were expecting because of this. If you asked for a payoff figure good for today, you would be paying the principal plus any fees or charges on the account plus this much interest: The amount of interest from the 1st of this month thru today because the payment you made back on the 1st paid for last month. If you are paying later than today and not making a payment that is due, you have to calculate the interest and late fees up to the day the bank gets the check. If you are paying off today and you have to overnight the check or wire, make sure you add in the interest until it gets there and is opened during regular business hours.