Jan 132015
 

Buyer prepayments and escrows closing costs worksheet

buyer prepayments and escrows closing costs

Below are the typical prepayment and escrow closing costs for a residential home buyer borrower (excluding title costs and loan prorations). Use the form as a worksheet to calculate your prepay and escrow lending costs by adding and totaling your estimates in the Estimate $ column. Use the linked calculators and the provided pro-rata formula to obtain estimates.

Many lenders want to avoid a borrower having to come up with a large amount to pay for annual expenses when they are due. They, therefore, require their borrowers to pre-pay these expenses into escrow in monthly installments, so that when they are due, then the full amount of money will be available, and the borrower will not under pressure. Property taxes and insurances are the most significant pre-payments that can increase monthly loan payments. These inflated payments are referred to a PITI payments (Principle, Interest, Taxes and Insurance).

Lenders also often require that their borrowers are three months ahead with their pre-payments, so that they have a cushion against default. This cushion increases a buyer’s closing costs as it has to be paid into escrow at the time of closing.

CostEstimate $How calculated Explanation
Property taxes  Paid to lender escrow $* Year tax bill/12 X 3A provision against default
Homeowners insurance escrow – Paid to lender escrow $* Year ins. bill/12 X 3A provision against default
Private mortgage insurance (PMI) – paid to title co. $* Year PMI prem. /12 X 3A provision against default when borrowing more than 80% of home value
Mortgage insurance Premium (MIP) – paid to title co. $* Year MIP prem. /12 X 3A provision against default when borrowing more than 80% of home value
Flood Insurance Escrow – paid to title co. $* Year prem. /12 X 3A provision against default
Condo fees – paid to title co. $* Year fees/12 X 3A provision against default
Home owners association fees (HOA) – paid to title co. $* Year fees/12 X 3A provision against default
Annual assessments – paid to title co. $* Year assess./12 X 3A provision against default
Other – $
 
Total loan closing costs $

Hopefully this information is helpful to buyers who want to know what their buyer prepayments and escrows closing costs will be.

For information on the remaining buyer closing costs, please visit:

Buyer loan closing costs work sheet

Buyer title closing costs work sheet

Download a hard copy of the complete buyer closing costs work sheet.

Disclaimer: Please note that all of the above is public information, that I am not providing tax advice, and that you should consult a licensed and certified tax professional before making any decisions about Florida property taxes.

Our services are always FREE to Buyers, and we contribute $500 towards closing costs if you buy through us, as well as $250 toward our Switch to Green, Switch it Forward Fund, to help fight poverty and climate change.

Let us show you how we can be Your Green Team to help you to Live in a High Performance Green Home, that will Save You Money and help you to Pay Your Mortgage Off Years Earlier, while at the same time, live in a home that is Healthier, More Comfortable, Safer and Kinder To The Earth.

Thank you for visiting. Please leave a comment below and then check out the rest of our BLOG. We look forward to making Green Home living your reality.

Marius J Smook – Licensed Real Estate Eco-Broker, LEED AP for HOMES, Home Energy Rater.

 January 13, 2015

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