What are prepaid items?
Answered by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
Prepaid items are amounts collected at closing to fund your escrow and cover costs in advance — typically property taxes, homeowners insurance premiums, and interest from closing to month-end. They're part of closing costs but aren't lender fees.
They're not extra charges, just bills paid early to set up escrow. We itemize prepaids on your Loan Estimate so you know what's a fee versus a prepaid.
What prepaids are
Prepaid items are costs you fund in advance at closing. They include property taxes, homeowners insurance, and some interest. They are not lender fees; they are your own future bills.
Much of this money seeds your escrow account. It covers the first round of taxes and insurance.
Planning prepaids in Florida
Florida insurance premiums make prepaids larger here. A full year of coverage is often collected up front. Knowing that avoids a closing-day surprise.
We estimate your prepaids early and clearly. Bring your target home and we will break the numbers down.