05/28/2026
Prepaid interest refers to the interest that accrues on your loan between the closing date and the end of the month. As the buyer, you are responsible for paying the prepaid interest at the time of closing. This amount is calculated based on the loan's interest rate and the number of days remaining in the month. By paying the prepaid interest upfront, you ensure that the interest is covered for the period before your first mortgage payment is due. Need additional help understanding the real estate process? DM us your questions and we are happy to help.