Closing Costs vs Prepaid Costs

So what’s the difference between closing costs vs. pre-paid expenses? Simple!⁣
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Closing costs are one-off payments due at closing for things like:⁣
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Attorney fees⁣
Appraisal fees⁣
Title company fees and title insurance⁣
Government fees and taxes to record the property sale⁣
Real estate commissions (typically paid by the seller)⁣
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Pre-paid expenses are upfront, ongoing payments due at closing for items folded into the monthly costs of homeownership. Things like:⁣
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Homeowners insurance premiums⁣
Property taxes⁣
Mortgage interest⁣
Initial escrow deposit⁣
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Pre-paid expenses head to an escrow account set up by your lender where they hang out until they’re due each year.⁣
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Got other real estate lingo questions? Send ‘em my way and I’ll be happy to answer!