Prepaids - Expenses necessary to create an escrow account or to adjust an existing account. Can include taxes, hazard insurance, private mortgage insurance and special assessments.Lenders will usually collect 3 to 4 months of pre-paid insurance and taxes upfront if you are escrowing taxes and insurance. These funds along with the monthly portion of taxes and insurance you pay each month will be held in your escrow account until they become due. The lender will forward payments to Insurance Company and Government.
Prepaid items are your property taxes and homeowners insurance. Most loan programs give you a better rate if you include these prepaid items into your monthly mortgage payment, and a lot of programs are now requiring this. The amount of months that are needed up front to go into your escrow account vary by the month in which your escrow closes.
There are different types of 100% loans. You can
either get 1 loan for 100% or an "80/20" loan. Speak to your mortgage
professional to see which program is best for you!
