Prepaid interest is the interest you pay when you close to cover the period up to the date of your first mortgage payment. An important concept to keep in mind here is the payment of mortgage interest on arrears. I want to say this again because it’s the biggest hurdle when trying to figure out how prepaid interest will affect your closure, for example if you make the first payment in July it is for the time you lived on the property in June. Let’s see. Let’s say prepaid interest will be active in it.
Let’s say you close on the fifteenth of July. Your final agent will probably put a minimum of 16 days’ down payment on your settlement statement, which means you will not receive your first August first payment with your new lender between July 15th and July 15th and you will receive it on September 1st instead. Will receive and it will cover the period of time you have lived properly Remember that in August you were funded or paid for the last day of July when you were financing through prepaid interest. Some loan agents say that it is actually true that you can avoid a down payment by paying interest, but if you would like to take a closer look at your situation on a similar basis or find out how your prepaid interest in your settlement affects your settlement, the interest days are the same.