Closing costs and prepaids: What's the difference?
Of all the expenses that come with buying a home, prepaid costs can sometimes take buyers by surprise. (And while we all love a good surprise, you definitely don't want one in the buying process!). So, here's what to know:
Prepaid costs are upfront cash payments you make at closing for various mortgage expenses before they’re actually due. Funds are held in escrow until needed. They include:
- Initial escrow deposit
- Homeowner’s insurance premiums
- Real estate property taxes
- Mortgage interest
Prepaids are separate from closing costs which include the title search, appraisal, and cost of processing the loan.
Curious about what your bottom line would be if you purchased a home? Want to buy but don't want surprises? Contact us, and let’s crunch the numbers!
The Lawrence Group-Keller Williams is honored to represent the Seller.