What are Pro-Rates?
Pro-rates are items that are calculated proportionately. A number of items may be prorated when you close on real estate transaction. You and the seller pay a prorated share of property taxes. If the seller keeps possession of your property after closing, you will usually receive a credit for a pro-rated amount of your total payment.
If the property you are buying is rented, the seller will owe you a prorated amount of the current month’s rent. And finally, your lender will charge you a prorated amount of interest at closing—from the day you close until the end of the month
Lots of math to be done. Helpfully, as a part of their escrow services, the title company will do the figuring and make sure you pay and are paid all of the pro-rates due.
In addition to our glossary, we have a library of downloadable PDFs that cover planning your purchase and gathering documentation, as well as all the mortgage fundamentals.
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