---
title: "Prepaids — What It Means | Ondo RE"
canonical: https://www.ondorealestate.com/glossary/prepaids/
---

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Mortgage & lending[All terms starting with P](/glossary/#letter-P)

# Prepaids

Also called: prepaid items, prepaid interest

Money collected at closing to fund your own future taxes and insurance, plus interest from closing to month end.

Prepaids are not a lender fee. They are your own expenses collected early: the first year of homeowners insurance, the initial deposit into the escrow account, and interest covering the days between closing and the start of the first full month.

They are frequently mistaken for closing costs. Both are due at closing, but prepaids fund an account you benefit from, while closing costs pay for services.

## Put a number on it

This term is an input in the calculator below.

- [Closing Cost CalculatorEstimate buyer closing costs, taxes, and prepaid expenses.](/calculators/closing-cost/)

## Related terms

- [Closing costsThe lender, title, and third-party fees due at closing: separate from your down payment.](/glossary/closing-costs/)
- [Escrow account (impounds)An account your servicer uses to collect and pay your property taxes and homeowners insurance alongside the mortgage payment.](/glossary/escrow-account/)
- [Homeowners insuranceProperty and liability coverage a lender requires, typically paid a year in advance at closing then escrowed.](/glossary/homeowners-insurance/)
- [Property taxAn annual tax assessed by local government on real property, usually collected monthly through escrow.](/glossary/property-tax/)

## Go deeper

- [Utah closing costs: title, origination, prepaids](/blog/utah-closing-costs-title-origination-prepaids/)

## More in Mortgage & lending

- [Amortization](/glossary/amortization/)
- [APR (Annual Percentage Rate)](/glossary/apr/)
- [ARM (Adjustable-Rate Mortgage)](/glossary/arm/)
- [Cash-out refinance](/glossary/cash-out-refinance/)
- [Closing costs](/glossary/closing-costs/)
- [Conforming loan](/glossary/conforming-loan/)

## Have a question about your own situation?

Ondo handles brokerage, lending, property management and notary under one roof, so the answer does not change depending on who you ask.

[Talk to Ondo](/contact/)[Browse all terms](/glossary/)

Loan information is provided by Ondo Real Estate (NMLS ID on file). This is not a commitment to lend, a loan approval, or an offer of credit. Rates, terms, and payments shown are estimates for illustration only, are not a quote, and are subject to credit approval, underwriting, and market conditions. You are not required to use Ondo for financing to buy or sell with Ondo. Equal Housing Lender. Program rules, fees, and county loan limits change. Confirm the current published schedule and lender overlays. Nothing here is a quote, a lock, or a credit decision. [Licensing and disclosures](/licensing/)