Pre-paid Expenses

Definition

• Recurring costs such as taxes, insurance, and interest that are paid at the time of closing. However, these costs cannot be financed. Also known as prepaid items or pre-paids.

Synonyms
pre-paid closing costs, pre-paid items, upfront expenses, pre-paids

Alternate Spellings
prepaids, pre-paids, prepaid items, pre-paid

Related Terms and Acronyms

• Application Fee — Definition,
  • What the lender charges to process the document in which a prospective borrower details his or her financial situation to qualify for a loan.
• Appraisal Fee — Definition,
  • What someone charges to deliver a professional opinion about how much a property is worth.
• Assumption Fee — Definition,
  • A lender's charge for updating records when a buyer takes responsibility for a mortgage from the seller.
• Closing — Definition,
  • In real estate, the delivery of a deed, the payment of the purchase price, the signing of notes, and the paying of closing costs, which completes a real estate transaction.
• Closing Costs — Definition,
  • The miscellaneous expenses involved in closing a real estate transaction that are over and above the purchase price. Some of the closing costs include title insurance, appraisal fee.
• Contract — Definition,
  • An agreement between two or more parties that can be enforced by law.
• Early Closing Cost Reimbursement — Definition,
  • Some line-of-credit lenders waive underwriting costs when a line is opened in anticipation of future profits. If a line is then closed early, these institutions impose those fees retroactively.
• Legal Fees and Disbursements — Definition,
  • Charges paid on your behalf by a solicitor that are in addition to professional costs.
• Non-Recurring Closing Costs (NRCC) — Acronym,
  • One-time fees paid at a real-estate settlement, including origination, appraisal, points, title insurance and credit report.
  ➥ Non-recurring fees at closing are those that are paid once such as a property inspection or property appraisal fees. Recurring fees are those that are paid again and again such as property taxes, condo fees and property insurance.
• Pre-paid Interest — Definition,
  • Interest that a borrower pays before it is due, usually to save taxes.
• Roll In — Definition,
  • To include certain closing costs, such as origination and settlement fees, in the mortgage.