WTF are Prepaids?

Jeffrey Loyd
4 min readMar 1, 2021
A couple with papers and a calculator in the kitchen figuring out the numbers.
Photo by Mikhail Nilov from Pexels

On page 2 of the Loan Estimate, where it breaks down all the various costs and fees for your home loan, on the right side in Section F, there are prepaids.
There are a few things a lender will require you to pay in advance. What you would normally pay anyway in due time, the lender wants you to pay upfront so they are paid up to the next due date. These are mortgage interest, property taxes and homeowner’s insurance.

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