Depending on the day of the month your loan closes, this charge may vary from a full month of interest to just a few days of interest. If your loan closes near the end of the month, you will have to pay only a few days of interest.

a pro-ration of a prepaid item for a specific period of time based on the close of escrow date.

Interest paid to the lender to offset a delay in the start of loan payments.

The interest due on the loan from the day of closing to the first day of the next month. This amount is paid at closing. Prepaid interest is higher if you close early in the month, and lower if you close late in the month. Back to the top

That amount of money collected at closing to cover the interest for the loan from the settlement date to the end of the month.

Interest paid in advance from the date of settlement to the beginning of the period covered by the first monthly mortgage payment.

Mortgage loan interest that is paid in advance to obtain a tax advantage.

The amount of interest charged to the borrower at closing to cover interest on the loan between the first scheduled payment and the time of closing.

Interim interest that accrues on the mortgage loan from the date of the loan closing to the beginning of the period covered by the first monthly payment.

Prepaid Interest is interest on your new mortgage that is paid at closing. The amount of interest will vary from 0 to 30 days, as it is calculated from the date of closing to month end. For example, if the loan closed on March 20th, prepaid interest would be owed from March 20th through March 31st. A normal monthly principal and interest payment would cover interest due for the previous month. If the loan closed on March 20th, the first payment would be due May 1st. The May 1st payment would cover interest due for the month of April.

Paid at closing, this is the amount of interest – usually calculated daily – that you owe from the day your loan closes to the end of the month. For example, if you close on January 15 and your interest is $21 per day, you would pay interest through January 31 ($21 X 16). After that, when you make your monthly mortgage payment, interest is always paid for the previous month. So you would not make your first payment until March 1, which pays principal and interest for the month of February.

The amount of interest to cover the period from close of escrow until the beginning of the first payment.

Prepaid interest is the interest charged to borrowers at loan closing to pay for the cost of borrowing for a partial month. For example, if a loan closes on the 15th of the month and the first payment is due 45 days later, the lender will charge 15 days of prepaid interest.

Interest paid in advance is deductible as an interest expense only as it accrues. The one exception to this rule involves the interest element when a cash-basis taxpayer pays points to obtain financing for the purchase or improvement of a principal residence if the payment of points is an established business practice in the area in which the indebtedness is incurred and the amount involved is not excessive. Points paid to refinance a principal residence, however, must be deducted over the life of the loan.

The interest you pay the lender in advance.  If you close before the end of the month, the lender will typically require you to pay interest through the end of the month.

Interest charged to a borrower at closing to cover interest on the loan between closing and the end of the month in which the loan closes.

Interest paid before it is due. For example, at the close of a real estate transaction the borrower may prepay interest that will accrue between closing and the first monthly payment.

At the closing of a real estate transaction, there is an interval before the first payment becomes due. Prepaid interest on the loan for this period is usually paid at closing, before it becomes due.

Interest paid before coming due. Most lenders require that the first payment be due the first of the second month following the closing. Interest is paid in arrears and collected at the end of the month.

interest paid in advance of its due date.

Interest charged to a borrower at closing to cover interest on the loan between closing and the due date of the first scheduled payment.

Interest paid before accrued.

At closing, a buyer prepays the interest on his loan for the rest of the month in which closing occurs. If the closing occurs early in the month, a lot of prepaid interest will be due. Less interest will be due if the closing occurs at the end of the month.

Mortgage interest that is paid in advance of when it is due to obtain tax advantages.

Charges for interest that are paid in advance of their accrual (i.e. point charges, etc.).

1) Interest paid before it is due. For example, at the close of a real estate transaction borrowers usually pay for the interest on their loan that falls between the closing period and the first monthly payment. 2) If you pay points on your loan, you are essentially dealing with pre-paid interest.

The interest charged at closing calculated to pay for the cost of borrowing for the remainder of the month.

Interest that the borrower pays the lender before it becomes due.

The per diem interest charged from the day of loan funding to the last day of the month. Because interest on a mortgage is collected in arrears, interest that will accrue in the month of closing must be prepaid.

Interest collected at closing due from the day of closing until the first of the month.

Mortgage interest that is paid from the date of the funding to the end of that calendar month.

Money paid by the borrower to the lender for interest that accrues between the closing date and the end of the month.

The interest paid at closing on a new loan covering the time period between the loan closing date and the end of the closing month.

Prepaid interest is the interest charged to borrowers at closing to pay for the cost of borrowing for a balance of the month. For example, if a loan closes on the 19th of the month and the first payment is due on the 1st of the following month, the lender will charge 12 days of prepaid interest.

Interest paid in advance of the time it is earned.

Interest that is paid in advance of when it is due. Typically charged to a borrower at closing to cover interest on the loan between the closing date and the first payment date.

interest due from the date of the loan closing to the first day of the following month. Most loans require payments to be due on the first day of the month. This is considered a settlement charge and will be disclosed on the HUD Settlement Statement

Interest that a borrower pays before it is due, usually to save taxes.

Interest that is paid before it is due to save the borrower money on taxes.

Interest on a loan that is paid before it is actually incurred.

Charge The portion of interest, collected at loan closing, which covers the time period between funding and the beginning of the first 30-day period covered by the first payment. For example, if the loan closed on 2/15, the first payment due on 4/1 would pay interest from 3/1 to 4/1. The prepaid interest would cover the period from 2/15 to 2/28.

The paying of interest before it is due.

Interest that is paid before it is due. Generally, prepaid interest is charged to a borrower at closing to cover interest on the loan between the closing date through and including the end of the month.