Why Mortgage Prepaid Interest Can be $55 or $1,500
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- เผยแพร่เมื่อ 25 ก.ค. 2024
- This video explains the confusing topic of prepaid interest on your mortgage. If you've ever wondered why this number can vary so much depending on when you close on your loan, this video has all the answers you need.
Join us as we break down the concept of prepaid interest, why lenders collect it, and how it's related to your mortgage closing date. Whether you're a first-time homebuyer or a refinancer, understanding this aspect of your loan can save you money and prevent confusion during the homebuying process.
Timestamps:
0:00 - Introduction
0:30 - What is prepaid interest?
1:15 - How interest accrues on a mortgage
2:20 - Closing date impact on prepaid interest
3:45 - Cost variations explained
5:10 - Clearing up the confusion
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April month payment also collected as prepaid??
Hi. In my example, closing in March, only March interest is collected in advance (“prepaid”). April interest is collected with your first regular mortgage payment on May 1st. If you have a typical fixed rate, fully amortizing loan, your total principal and interest payment will be the same every month. The allocation of each payment between principal and interest will change each month as the amount owed on the loan goes down each month, less interest will be charged the next month.
@@MortgageMasteryTheaterOk... so the Aprils monthly payment is collected in May...
@@Mohit-uk6pm interest accrued on the loan in April is paid with the payment due on May 1st. Interest accrued during May is paid with the payment due June 1st. And so on.
@@MortgageMasteryTheater.. ohhk... Thank you for the detail explanation. I saw other channels also but your videos are very much in detail and easy to understand.
@@Mohit-uk6pm Thanks!