prepaid expenses

Prepaid items are exactly what the name implies – payments made in advance of the monies due in order to obtain your new home loan.  The two most common prepaid items are homeowner’s insurance and mortgage interest (aka per diem interest).  Both are collected at closing where you can expect to pay one (1) year of your homeowner’s insurance premium; as well as, per diem interest which is calculated from the day that you close through the end of the month.