What are prepaid interest charges?
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Prepaid interest charges are charges due at closing for any daily interest that accrues on your loan between the date you close on your mortgage loan and the period covered by your first monthly mortgage payment.
This amount is listed on Page 2, section F of your Loan Estimate and Page 2, section F of your Closing Disclosure. These charges may change between the time you receive your Loan Estimate and the Closing Disclosure.
Note: You will not receive a Loan Estimate or Closing Disclosure if you are shopping for:
- A reverse mortgage
- A home equity line of credit (HELOC)
- A manufactured housing or mobile home loan not secured by real estate
- A subordinate loan through certain types of homebuyer assistance programs
For these kinds of loans, you should receive Truth-in-Lending disclosures. If you are shopping for a reverse mortgage, you will also receive a Good Faith Estimate (GFE) and a HUD-1 Settlement Statement. You can find your prepaid interest charges in Box 8 of your GFE and on Line 901 of your HUD-1 settlement statement.