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Section 900 - Items Required by Lender to the Paid in Advance:
This section consists of prepaid interest and homeowner's
insurance. You pay interest on the remaining days of the
month at closing. If you are refinancing, you most likely prepay
three months of insurance at closing. These prepaids exist
regardless of what lender you choose.
Line 901: Interest for ____
days @ ____ /day:
Lenders usually require borrowers
to pay the interest that accrues from the date of settlement to
the first monthly payment.
Line 902: Mortgage Insurance
Premium:
The lender may require you to pay
your first year's mortgage insurance premium or a lump sum premium
that covers the life of the loan, in advance, at settlement.
Line 903: Hazard Insurance
Premium:
Hazard insurance protects you and
the lender against loss due to fire, windstorm, and natural
hazards. Lenders often require the borrower to bring to settlement
a "paid-up" first year's policy or to pay for the first year's
premium at settlement.
Line 904: Flood Insurance:
If the lender requires flood
insurance, it is usually listed here.
Line
905: VA Funding Fee:
If your a Vet or active duty, the
lender requires this fee.
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