This is a YouTube video titled "🚨 Prepaid Interest 🚨" containing an explanation about prepaid interest on a mortgage. The content involves a single speaker providing examples to clarify how mortgage payments and interest are calculated and scheduled, focusing on the timing of payments relative to closing dates. The video was created on November 11, 2021.
Two examples here to help explain prepaid interest on a mortgage. Now, in both examples, the first payments due after the first full month has passed. Also important to note that on all home loans, mortgage payments actually cover the previous month's interest, but the person was already in the home. So this person's closing at the end of the month. They have one day of interest to bridge that gap. But their new mortgage payments due in about 31 days. This person has to cover the whole 30 days of interest at closing, but they have 60 days before the first payment is due. Not that one's better or worse, they're just a little bit different.
