{"id":104008,"date":"2025-07-28T12:41:44","date_gmt":"2025-07-28T19:41:44","guid":{"rendered":"https:\/\/www.redfin.com\/blog\/?p=104008"},"modified":"2025-07-28T12:41:44","modified_gmt":"2025-07-28T19:41:44","slug":"which-costs-are-prepaid-when-buying-a-home","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/","title":{"rendered":"Which Costs Are Prepaid When Buying a Home? Here&#8217;s the Scoop"},"content":{"rendered":"\r\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.redfin.com\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"exclude\"><span style=\"font-weight: 400;\">Buying a home<\/span><\/a><span style=\"font-weight: 400;\"> comes with a lot of paperwork and numbers that can quickly feel overwhelming. One term you might come across is \u201cprepaid costs\u201d\u2014but what exactly does that mean?<\/span><\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">Prepaid costs are fees you pay upfront at closing to cover things like property taxes and insurance before they\u2019re due. These charges catch many buyers off guard, so understanding what they are and why they\u2019re required can help you avoid any last-minute confusion.<\/span><\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">Whether you recently purchased a home in <\/span><a href=\"https:\/\/www.redfin.com\/city\/30772\/OR\/Portland\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"exclude\"><span style=\"font-weight: 400;\">Portland, OR<\/span><\/a><span style=\"font-weight: 400;\"> or <\/span><a href=\"https:\/\/www.redfin.com\/city\/16904\/CA\/San-Diego\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"exclude\"><span style=\"font-weight: 400;\">San Diego, CA<\/span><\/a><span style=\"font-weight: 400;\">, this Redfin guide will explain prepaid costs in simple terms, so you can head into closing day feeling confident and prepared.<\/span><\/p>\r\n\r\n\r\n\r\n<div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\">\r\n<h2>Table of contents<\/h2>\r\n<ul>\r\n<li><a href=\"#h-what-are-prepaid-costs-when-buying-a-home\" data-level=\"2\">What are prepaid costs when buying a home?<\/a><\/li>\r\n<li><a href=\"#h-so-which-prepaid-costs-should-you-expect-at-closing\" data-level=\"2\">So, which prepaid costs should you expect at closing?<\/a><\/li>\r\n<li><a href=\"#h-what-should-you-expect-to-pay-in-prepaid-costs\" data-level=\"2\">What should you expect to pay in prepaid costs?<\/a><\/li>\r\n<li><a href=\"#h-how-to-estimate-prepaid-costs\" data-level=\"2\">How to estimate prepaid costs<\/a><\/li>\r\n<li><a href=\"#h-closing-costs-vs-prepaid-costs\" data-level=\"2\">Closing costs vs. prepaid costs<\/a><\/li>\r\n<li><a href=\"#h-what-can-you-do-to-prepare\" data-level=\"2\">What can you do to prepare?<\/a><\/li>\r\n<li><a href=\"#h-faqs-prepaid-costs-when-buying-a-home\" data-level=\"2\">FAQS: Prepaid costs when buying a home<\/a><\/li>\r\n<\/ul>\r\n<\/div>\r\n\r\n\r\n\r\n<h2 id=\"h-what-are-prepaid-costs-when-buying-a-home\" class=\"wp-block-heading\"><span style=\"font-weight: 400;\">What are prepaid costs when buying a home?<\/span><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">When you <\/span><a href=\"https:\/\/www.redfin.com\/blog\/steps-to-closing-on-a-house\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"exclude\"><span style=\"font-weight: 400;\">close on a home<\/span><\/a><span style=\"font-weight: 400;\">, the responsibility for certain expenses transfers from the seller to you. To prevent any missed payments, lenders ask buyers to pay some of these costs in advance at closing. These aren\u2019t part of your down payment or closing costs in the traditional sense \u2014 they\u2019re more like \u201cpay now, be covered later\u201d fees.<\/span><\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">These upfront payments, known as prepaid costs, cover things like property taxes and insurance before they come due. Similar to your <\/span><a href=\"https:\/\/www.redfin.com\/blog\/what-is-earnest-money\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"exclude\"><span style=\"font-weight: 400;\">earnest money<\/span><\/a><span style=\"font-weight: 400;\"> deposit, these funds are placed into an escrow account, where they\u2019re safely held until the bills need to be paid.<\/span><\/p>\r\n\r\n\r\n\r\n<h2 id=\"h-so-which-prepaid-costs-should-you-expect-at-closing\" class=\"wp-block-heading\"><span style=\"font-weight: 400;\">So, which prepaid costs should you expect at closing?<\/span><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">Before we dive in, it\u2019s important to know that lenders require these costs to be paid upfront. Simply put, it\u2019s about protecting everyone involved. These prepaid costs make sure important bills like property taxes and insurance are covered right from the start \u2014 even before your first mortgage payment is due. That way, no one falls behind, and you can head into closing with confidence.<\/span><\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">Here\u2019s a breakdown of the prepaid costs your lender might require.<\/span><\/p>\r\n\r\n\r\n\r\n<h3 id=\"h-1-property-taxes\" class=\"wp-block-heading\"><span style=\"font-weight: 400;\">1. Property taxes<\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">Depending on when you close and where you live, you might need to prepay a few months of <\/span><a href=\"https:\/\/www.redfin.com\/blog\/how-do-property-taxes-work\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"exclude\"><span style=\"font-weight: 400;\">property taxes<\/span><\/a><span style=\"font-weight: 400;\">. <\/span><b>For example:<\/b><span style=\"font-weight: 400;\"> let\u2019s say you close in October and taxes are due annually in November, you might prepay the rest of the year\u2019s taxes to avoid late payments. Property tax schedules vary by location, so it\u2019s important to know your local rules.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">Tax bills don\u2019t care when you bought the house, they still need to be paid on time. Your lender just wants to make sure those bills get covered.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h3 id=\"h-2-homeowners-insurance\" class=\"wp-block-heading\"><span style=\"font-weight: 400;\">2. Homeowners insurance<\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">You\u2019ll almost always pay your first year of <\/span><a href=\"https:\/\/www.redfin.com\/blog\/how-much-homeowners-insurance-do-you-need\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"exclude\"><span style=\"font-weight: 400;\">homeowners insurance<\/span><\/a><span style=\"font-weight: 400;\"> upfront at closing. It\u2019s a must-have, and your lender won\u2019t approve your loan without it. Basically, it makes sure your new home is protected from day one.<\/span><\/p>\r\n\r\n\r\n\r\n<h3 id=\"h-3-mortgage-interest-nbsp\" class=\"wp-block-heading\"><span style=\"font-weight: 400;\">3. Mortgage interest\u00a0<\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">Here\u2019s the tricky part: if you close mid-month, interest starts accruing the day you take ownership, even though your first mortgage payment isn\u2019t due until next month. To cover that gap, your lender will collect prepaid <\/span><a href=\"https:\/\/www.redfin.com\/blog\/how-does-mortgage-interest-work\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"exclude\"><span style=\"font-weight: 400;\">mortgage interes<\/span><\/a><span style=\"font-weight: 400;\">t at closing for those in-between days.<\/span><\/p>\r\n\r\n\r\n\r\n<h3 id=\"h-4-escrow-account-funds\" class=\"wp-block-heading\"><span style=\"font-weight: 400;\">4. Escrow account funds<\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">Most buyers have an escrow account to cover future property taxes and insurance. At closing, you\u2019ll put a few months\u2019 worth of those payments into this account so your lender can pay the bills on your behalf when they\u2019re due.<\/span><\/p>\r\n\r\n\r\n\r\n<h3 id=\"h-5-mortgage-insurance\" class=\"wp-block-heading\"><span style=\"font-weight: 400;\">5. Mortgage insurance<\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">If your down payment is less than 20%, you&#8217;ll usually need to pay for mortgage insurance. This protects the lender if you default on the loan. For conventional loans, it&#8217;s called <\/span><a href=\"https:\/\/www.redfin.com\/blog\/what-is-pmi-insurance\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"exclude\"><span style=\"font-weight: 400;\">private mortgage insurance (PMI)<\/span><\/a><span style=\"font-weight: 400;\">. Usually, you&#8217;ll pay the first month&#8217;s PMI premium upfront at closing, then it&#8217;s added to your monthly mortgage payments. PMI helps you get a loan with a smaller down payment but adds to your costs until you build enough equity to cancel it.<\/span><\/p>\r\n\r\n\r\n\r\n<h2 id=\"h-what-should-you-expect-to-pay-in-prepaid-costs\" class=\"wp-block-heading\"><span style=\"font-weight: 400;\">What should you expect to pay in prepaid costs?<\/span><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><b>Prepaid costs typically range from about 2% to 5% of your home\u2019s purchase price<\/b><span style=\"font-weight: 400;\">.<\/span> <span style=\"font-weight: 400;\">The exact amount depends on factors like your closing date, local property tax rates, homeowners insurance premiums, and whether your lender requires you to escrow these payments.<\/span><\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">For example, if you\u2019re buying a $350,000 home, your prepaid costs might fall between <\/span><b>$7,000 and $17,500<\/b><span style=\"font-weight: 400;\">. These expenses can add up quickly, so it\u2019s important to budget for them.<\/span><\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><b>Pro tip:<\/b><span style=\"font-weight: 400;\"> Closing later in the month can reduce your prepaid interest since you\u2019ll owe less interest upfront. This can save you a few hundred dollars, which can be helpful if you\u2019re working with a tight budget.<\/span><\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><b><i>&gt;&gt; Read: <\/i><\/b><a href=\"https:\/\/www.redfin.com\/blog\/how-much-money-do-i-need-to-buy-a-house\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"exclude\"><b><i>How Much Money Do I Need to Buy a House?<\/i><\/b><\/a><\/p>\r\n\r\n\r\n\r\n<h2 id=\"h-how-to-estimate-prepaid-costs\" class=\"wp-block-heading\"><span style=\"font-weight: 400;\">How to estimate prepaid costs<\/span><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">As we mentioned earlier, prepaid costs usually fall somewhere between 2% and 5% of your home\u2019s purchase price.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">Here\u2019s a quick breakdown of what to expect for each fee:<\/span><\/p>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li><b>Homeowners insurance:<\/b><span style=\"font-weight: 400;\"> Most lenders want you to pay <\/span><b>6 to 12 months upfront<\/b><span style=\"font-weight: 400;\">. So if your annual premium is $1,200, you\u2019ll probably prepay somewhere between <\/span><b>$1,200 and $2,400 at closing<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\r\n\r\n\r\n\r\n<li><b>Property taxes:<\/b><span style=\"font-weight: 400;\"> These <\/span><b>vary based on where you live<\/b><span style=\"font-weight: 400;\"> and when you close. A quick way to estimate: take your yearly tax bill, divide by 365, and multiply by the number of days between your closing date and the next tax due date.<\/span><\/li>\r\n\r\n\r\n\r\n<li><b>Mortgage interest:<\/b><span style=\"font-weight: 400;\"> Interest starts adding up the day you close\u2014even though your first full payment isn\u2019t due until the following month. So if you <\/span><b>close mid-month, you\u2019ll prepay interest for those in-between days<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\r\n\r\n\r\n\r\n<li><b>Escrow account funds:<\/b><span style=\"font-weight: 400;\"> If your lender sets up an escrow account (which most do), they\u2019ll probably ask you to put in a couple of months\u2019 worth of property taxes and insurance upfront. It\u2019s just a buffer to make sure those bills get paid on time.<\/span><\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<h2 id=\"h-closing-costs-vs-prepaid-costs\" class=\"wp-block-heading\"><span style=\"font-weight: 400;\">Closing costs vs. prepaid costs<\/span><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">Closing costs and prepaid costs are not the same thing, and knowing the difference can help you budget smarter for closing day.<\/span><\/p>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li><b>Closing costs<\/b><span style=\"font-weight: 400;\"> are one-time fees you pay to third parties for services related to buying your home.\u00a0<\/span><\/li>\r\n\r\n\r\n\r\n<li><b>Prepaid costs<\/b><span style=\"font-weight: 400;\">, on the other hand, are future homeownership expenses you\u2019re just paying in advance.\u00a0<\/span><\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">Let\u2019s take a closer look:<\/span><\/p>\r\n\r\n\r\n\r\n<figure class=\"wp-block-table\">\r\n<table class=\"has-fixed-layout\">\r\n<tbody>\r\n<tr>\r\n<td><b>Closing costs<\/b><\/td>\r\n<td><b>Prepaid costs<\/b><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><span style=\"font-weight: 400;\">Paid <\/span><b>once<\/b><span style=\"font-weight: 400;\"> at closing<\/span><\/td>\r\n<td><b>Ongoing expenses<\/b><span style=\"font-weight: 400;\"> you&#8217;re paying upfront, like taxes and insurance<\/span><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><span style=\"font-weight: 400;\">May include: <\/span><b>loan origination fees<\/b><span style=\"font-weight: 400;\">,<\/span><b> title insurance<\/b><span style=\"font-weight: 400;\">, <\/span><b>appraisal fees<\/b><span style=\"font-weight: 400;\">, and <\/span><b>recording fees<\/b><\/td>\r\n<td><span style=\"font-weight: 400;\">May include: <\/span><b>property taxes<\/b><span style=\"font-weight: 400;\">, <\/span><b>homeowners insurance<\/b><span style=\"font-weight: 400;\">,<\/span><b> prepaid interest<\/b><span style=\"font-weight: 400;\">, <\/span><b>escrow funds<\/b><span style=\"font-weight: 400;\">, and<\/span><b> possibly PMI<\/b><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><b>Covers services<\/b><span style=\"font-weight: 400;\"> needed to process and finalize your loan<\/span><\/td>\r\n<td><b>Covers future homeownership costs<\/b><span style=\"font-weight: 400;\"> before they\u2019re due<\/span><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/figure>\r\n\r\n\r\n\r\n<h2 id=\"h-what-can-you-do-to-prepare\" class=\"wp-block-heading\"><span style=\"font-weight: 400;\">What can you do to prepare?<\/span><\/h2>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li><b>Ask for estimates early. <\/b><span style=\"font-weight: 400;\">Your lender will give you a <\/span><a href=\"https:\/\/www.redfin.com\/blog\/how-to-read-loan-estimate\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"exclude\"><span style=\"font-weight: 400;\">loan estimate<\/span><\/a><span style=\"font-weight: 400;\"> \u2014 look it over and don\u2019t be afraid to ask questions.<\/span><\/li>\r\n\r\n\r\n\r\n<li><b>Shop around for homeowners insurance.<\/b><span style=\"font-weight: 400;\"> Rates vary, and lower premiums = lower prepaid costs.<\/span><\/li>\r\n\r\n\r\n\r\n<li><b>Time your closing strategically.<\/b><span style=\"font-weight: 400;\"> If you close closer to the end of the month, you\u2019ll pay less in prepaid interest.<\/span><\/li>\r\n\r\n\r\n\r\n<li><b>Budget for more than the <\/b><a href=\"https:\/\/www.redfin.com\/blog\/how-much-down-payment-for-a-house\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"exclude\"><b>down payment<\/b><\/a><b>.<\/b><span style=\"font-weight: 400;\"> It\u2019s easy to forget how much these extras add up \u2014 so don\u2019t!<\/span><\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<h2 id=\"h-faqs-prepaid-costs-when-buying-a-home\" class=\"wp-block-heading\"><span style=\"font-weight: 400;\">FAQS: Prepaid costs when buying a home<\/span><\/h2>\r\n\r\n\r\n\r\n<h3 id=\"h-what-are-prepaid-costs\" class=\"wp-block-heading\"><span style=\"font-weight: 400;\">What are prepaid costs?<\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">Prepaid costs are <\/span><b>upfront expenses you pay at closing<\/b><span style=\"font-weight: 400;\"> for things like property taxes, homeowners insurance, mortgage interest, and escrow funds. These payments cover bills that come due after you take ownership, ensuring your home and loan are protected from day one.<\/span><\/p>\r\n\r\n\r\n\r\n<h3 id=\"h-why-do-i-need-to-pay-them\" class=\"wp-block-heading\"><span style=\"font-weight: 400;\">Why do I need to pay them?<\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><b>Lenders require these costs<\/b><span style=\"font-weight: 400;\"> to ensure important bills like taxes and insurance are paid on time, even before your first mortgage payment is due. This helps avoid any missed payments and gives everyone peace of mind.<\/span><\/p>\r\n\r\n\r\n\r\n<h3 id=\"h-how-much-do-they-cost\" class=\"wp-block-heading\"><span style=\"font-weight: 400;\">How much do they cost?<\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">Prepaid costs generally run between<\/span><b> 2% and 5% of your home\u2019s price<\/b><span style=\"font-weight: 400;\">. For example, on a $350,000 home, you might pay anywhere from $7,000 to $17,500. The exact amount depends on your closing date, local taxes, insurance premiums, and escrow requirements.<\/span><\/p>\r\n\r\n\r\n\r\n<h3 id=\"h-where-can-i-find-my-prepaid-costs\" class=\"wp-block-heading\"><span style=\"font-weight: 400;\">Where can I find my prepaid costs?<\/span><\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><span style=\"font-weight: 400;\">You\u2019ll find your prepaid costs listed in your loan estimate and closing disclosure\u2014these docs break down exactly what you\u2019ll owe at closing. If you\u2019re scanning through and not sure what\u2019s what, don\u2019t stress. Your lender or <\/span><a href=\"https:\/\/www.redfin.com\/real-estate-agents\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"exclude\"><span style=\"font-weight: 400;\">agent<\/span><\/a><span style=\"font-weight: 400;\"> can walk you through the details and help make sure everything adds up.<\/span><\/p>\r\n","protected":false},"excerpt":{"rendered":"<p>Buying a home comes with a lot of paperwork and numbers that can quickly feel overwhelming. One term you might come across is \u201cprepaid costs\u201d\u2014but what exactly does that mean? Prepaid costs are fees you pay upfront at closing to cover things like property taxes and insurance before they\u2019re due. These charges catch many buyers [&hellip;]<\/p>\n","protected":false},"author":815,"featured_media":103918,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[34276],"tags":[34529],"coauthors":[36413],"class_list":["post-104008","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-home","tag-buying-faq"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.7 (Yoast SEO v27.9) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Which Costs Are Prepaid When Buying a Home? | Redfin<\/title>\n<meta name=\"description\" content=\"Wondering what prepaid costs are when buying a home? Learn what they cover, why they matter, and how to prepare before closing day.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Which Costs Are Prepaid When Buying a Home? Here&#039;s the Scoop\" \/>\n<meta property=\"og:description\" content=\"Wondering what prepaid costs are when buying a home? Learn what they cover, why they matter, and how to prepare before closing day.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/\" \/>\n<meta property=\"og:site_name\" content=\"Redfin | Real Estate Tips for Home Buying, Selling &amp; More\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/redfin\" \/>\n<meta property=\"article:published_time\" content=\"2025-07-28T19:41:44+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.redfin.com\/blog\/wp-content\/uploads\/2025\/07\/MixCollage-24-Jul-2025-02-17-PM-4334.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Candace Tillery\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@redfin\" \/>\n<meta name=\"twitter:site\" content=\"@redfin\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Candace Tillery\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/which-costs-are-prepaid-when-buying-a-home\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/which-costs-are-prepaid-when-buying-a-home\\\/\"},\"author\":{\"name\":\"Candace Tillery\",\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/#\\\/schema\\\/person\\\/fc62b34adf920c8e9d1274c64f4da163\"},\"headline\":\"Which Costs Are Prepaid When Buying a Home? Here&#8217;s the Scoop\",\"datePublished\":\"2025-07-28T19:41:44+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/which-costs-are-prepaid-when-buying-a-home\\\/\"},\"wordCount\":1415,\"publisher\":{\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/which-costs-are-prepaid-when-buying-a-home\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.redfin.com/blog\\\/wp-content\\\/uploads\\\/2025\\\/07\\\/MixCollage-24-Jul-2025-02-17-PM-4334.jpg\",\"keywords\":[\"buying faq\"],\"articleSection\":[\"Buying a Home\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2025\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/#organization\"},\"accessibilityFeature\":[\"tableOfContents\"]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/which-costs-are-prepaid-when-buying-a-home\\\/\",\"url\":\"https:\\\/\\\/www.redfin.com/blog\\\/which-costs-are-prepaid-when-buying-a-home\\\/\",\"name\":\"Which Costs Are Prepaid When Buying a Home? | Redfin\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/which-costs-are-prepaid-when-buying-a-home\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/which-costs-are-prepaid-when-buying-a-home\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.redfin.com/blog\\\/wp-content\\\/uploads\\\/2025\\\/07\\\/MixCollage-24-Jul-2025-02-17-PM-4334.jpg\",\"datePublished\":\"2025-07-28T19:41:44+00:00\",\"description\":\"Wondering what prepaid costs are when buying a home? Learn what they cover, why they matter, and how to prepare before closing day.\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/which-costs-are-prepaid-when-buying-a-home\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.redfin.com/blog\\\/which-costs-are-prepaid-when-buying-a-home\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/which-costs-are-prepaid-when-buying-a-home\\\/#primaryimage\",\"url\":\"https:\\\/\\\/www.redfin.com/blog\\\/wp-content\\\/uploads\\\/2025\\\/07\\\/MixCollage-24-Jul-2025-02-17-PM-4334.jpg\",\"contentUrl\":\"https:\\\/\\\/www.redfin.com/blog\\\/wp-content\\\/uploads\\\/2025\\\/07\\\/MixCollage-24-Jul-2025-02-17-PM-4334.jpg\",\"width\":1200,\"height\":800,\"caption\":\"A white, cutout-style house sits on a wooden surface next to stacks of gold coins that gradually increase in height, representing growing equity or value. A bright yellow arrow dramatically curves upwards from the lowest stack of coins, pointing towards the top right, symbolizing an increase. The background is a solid, deep teal color. This image visually represents the concept of increasing home equity and financial growth, which is often a consideration when asking \\\"Do you need a down payment to refinance?\\\"\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/which-costs-are-prepaid-when-buying-a-home\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.redfin.com/blog\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Which Costs Are Prepaid When Buying a Home? Here&#8217;s the Scoop\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/#website\",\"url\":\"https:\\\/\\\/www.redfin.com/blog\\\/\",\"name\":\"Redfin | Real Estate Tips for Home Buying, Selling &amp; More\",\"description\":\"Real estate on Wall Street, Main Street and your street.\",\"publisher\":{\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.redfin.com/blog\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/#organization\",\"name\":\"Redfin\",\"url\":\"https:\\\/\\\/www.redfin.com/blog\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/www.redfin.com/blog\\\/wp-content\\\/uploads\\\/2020\\\/03\\\/Redfin-logo-512x512-1.jpg\",\"contentUrl\":\"https:\\\/\\\/www.redfin.com/blog\\\/wp-content\\\/uploads\\\/2020\\\/03\\\/Redfin-logo-512x512-1.jpg\",\"width\":512,\"height\":512,\"caption\":\"Redfin\"},\"image\":{\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/#\\\/schema\\\/logo\\\/image\\\/\"},\"sameAs\":[\"https:\\\/\\\/www.facebook.com\\\/redfin\",\"https:\\\/\\\/x.com\\\/redfin\",\"https:\\\/\\\/www.instagram.com\\\/redfinrealestate\\\/\",\"https:\\\/\\\/www.linkedin.com\\\/company\\\/redfin\",\"https:\\\/\\\/www.pinterest.com\\\/redfin\\\/\",\"https:\\\/\\\/www.youtube.com\\\/channel\\\/UCMIuo1QSGcmWnevT9jdC_Ow\",\"https:\\\/\\\/en.wikipedia.org\\\/wiki\\\/Redfin\"]},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/www.redfin.com/blog\\\/#\\\/schema\\\/person\\\/fc62b34adf920c8e9d1274c64f4da163\",\"name\":\"Candace Tillery\",\"description\":\"Candace is a member of Redfin's content marketing team, where she enjoys creating lifestyle, organization, and how-to blogs to drive engagement. Her dream home would feature a breathtaking beach view and an abundance of windows to fill the space with natural light.\",\"url\":\"https:\\\/\\\/www.redfin.com/blog\\\/author\\\/candace-tilleryredfin-com\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Which Costs Are Prepaid When Buying a Home? | Redfin","description":"Wondering what prepaid costs are when buying a home? Learn what they cover, why they matter, and how to prepare before closing day.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/","og_locale":"en_US","og_type":"article","og_title":"Which Costs Are Prepaid When Buying a Home? Here's the Scoop","og_description":"Wondering what prepaid costs are when buying a home? Learn what they cover, why they matter, and how to prepare before closing day.","og_url":"https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/","og_site_name":"Redfin | Real Estate Tips for Home Buying, Selling &amp; More","article_publisher":"https:\/\/www.facebook.com\/redfin","article_published_time":"2025-07-28T19:41:44+00:00","og_image":[{"width":1200,"height":800,"url":"https:\/\/www.redfin.com\/blog\/wp-content\/uploads\/2025\/07\/MixCollage-24-Jul-2025-02-17-PM-4334.jpg","type":"image\/jpeg"}],"author":"Candace Tillery","twitter_card":"summary_large_image","twitter_creator":"@redfin","twitter_site":"@redfin","twitter_misc":{"Written by":"Candace Tillery","Est. reading time":"7 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/#article","isPartOf":{"@id":"https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/"},"author":{"name":"Candace Tillery","@id":"https:\/\/www.redfin.com\/blog\/#\/schema\/person\/fc62b34adf920c8e9d1274c64f4da163"},"headline":"Which Costs Are Prepaid When Buying a Home? Here&#8217;s the Scoop","datePublished":"2025-07-28T19:41:44+00:00","mainEntityOfPage":{"@id":"https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/"},"wordCount":1415,"publisher":{"@id":"https:\/\/www.redfin.com\/blog\/#organization"},"image":{"@id":"https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/#primaryimage"},"thumbnailUrl":"https:\/\/www.redfin.com\/blog\/wp-content\/uploads\/2025\/07\/MixCollage-24-Jul-2025-02-17-PM-4334.jpg","keywords":["buying faq"],"articleSection":["Buying a Home"],"inLanguage":"en-US","copyrightYear":"2025","copyrightHolder":{"@id":"https:\/\/www.redfin.com\/blog\/#organization"},"accessibilityFeature":["tableOfContents"]},{"@type":"WebPage","@id":"https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/","url":"https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/","name":"Which Costs Are Prepaid When Buying a Home? | Redfin","isPartOf":{"@id":"https:\/\/www.redfin.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/#primaryimage"},"image":{"@id":"https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/#primaryimage"},"thumbnailUrl":"https:\/\/www.redfin.com\/blog\/wp-content\/uploads\/2025\/07\/MixCollage-24-Jul-2025-02-17-PM-4334.jpg","datePublished":"2025-07-28T19:41:44+00:00","description":"Wondering what prepaid costs are when buying a home? Learn what they cover, why they matter, and how to prepare before closing day.","breadcrumb":{"@id":"https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/#primaryimage","url":"https:\/\/www.redfin.com\/blog\/wp-content\/uploads\/2025\/07\/MixCollage-24-Jul-2025-02-17-PM-4334.jpg","contentUrl":"https:\/\/www.redfin.com\/blog\/wp-content\/uploads\/2025\/07\/MixCollage-24-Jul-2025-02-17-PM-4334.jpg","width":1200,"height":800,"caption":"A white, cutout-style house sits on a wooden surface next to stacks of gold coins that gradually increase in height, representing growing equity or value. A bright yellow arrow dramatically curves upwards from the lowest stack of coins, pointing towards the top right, symbolizing an increase. The background is a solid, deep teal color. This image visually represents the concept of increasing home equity and financial growth, which is often a consideration when asking \"Do you need a down payment to refinance?\""},{"@type":"BreadcrumbList","@id":"https:\/\/www.redfin.com\/blog\/which-costs-are-prepaid-when-buying-a-home\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.redfin.com\/blog\/"},{"@type":"ListItem","position":2,"name":"Which Costs Are Prepaid When Buying a Home? Here&#8217;s the Scoop"}]},{"@type":"WebSite","@id":"https:\/\/www.redfin.com\/blog\/#website","url":"https:\/\/www.redfin.com\/blog\/","name":"Redfin | Real Estate Tips for Home Buying, Selling &amp; More","description":"Real estate on Wall Street, Main Street and your street.","publisher":{"@id":"https:\/\/www.redfin.com\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.redfin.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.redfin.com\/blog\/#organization","name":"Redfin","url":"https:\/\/www.redfin.com\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.redfin.com\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/www.redfin.com\/blog\/wp-content\/uploads\/2020\/03\/Redfin-logo-512x512-1.jpg","contentUrl":"https:\/\/www.redfin.com\/blog\/wp-content\/uploads\/2020\/03\/Redfin-logo-512x512-1.jpg","width":512,"height":512,"caption":"Redfin"},"image":{"@id":"https:\/\/www.redfin.com\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/redfin","https:\/\/x.com\/redfin","https:\/\/www.instagram.com\/redfinrealestate\/","https:\/\/www.linkedin.com\/company\/redfin","https:\/\/www.pinterest.com\/redfin\/","https:\/\/www.youtube.com\/channel\/UCMIuo1QSGcmWnevT9jdC_Ow","https:\/\/en.wikipedia.org\/wiki\/Redfin"]},{"@type":"Person","@id":"https:\/\/www.redfin.com\/blog\/#\/schema\/person\/fc62b34adf920c8e9d1274c64f4da163","name":"Candace Tillery","description":"Candace is a member of Redfin's content marketing team, where she enjoys creating lifestyle, organization, and how-to blogs to drive engagement. Her dream home would feature a breathtaking beach view and an abundance of windows to fill the space with natural light.","url":"https:\/\/www.redfin.com\/blog\/author\/candace-tilleryredfin-com\/"}]}},"_links":{"self":[{"href":"https:\/\/www.redfin.com\/blog\/wp-json\/wp\/v2\/posts\/104008","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.redfin.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.redfin.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.redfin.com\/blog\/wp-json\/wp\/v2\/users\/815"}],"replies":[{"embeddable":true,"href":"https:\/\/www.redfin.com\/blog\/wp-json\/wp\/v2\/comments?post=104008"}],"version-history":[{"count":3,"href":"https:\/\/www.redfin.com\/blog\/wp-json\/wp\/v2\/posts\/104008\/revisions"}],"predecessor-version":[{"id":104012,"href":"https:\/\/www.redfin.com\/blog\/wp-json\/wp\/v2\/posts\/104008\/revisions\/104012"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.redfin.com\/blog\/wp-json\/wp\/v2\/media\/103918"}],"wp:attachment":[{"href":"https:\/\/www.redfin.com\/blog\/wp-json\/wp\/v2\/media?parent=104008"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.redfin.com\/blog\/wp-json\/wp\/v2\/categories?post=104008"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.redfin.com\/blog\/wp-json\/wp\/v2\/tags?post=104008"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.redfin.com\/blog\/wp-json\/wp\/v2\/coauthors?post=104008"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}