Prepaid items

Prepaid items are costs collected at closing that aren't fees for a service but money set aside for expenses you'd owe anyway: the first year of homeowners insurance, a cushion of property taxes to seed the escrow account, and interest for the days between closing and your first payment.

Because they fund your own future bills, prepaids aren't really a charge in the way an origination fee is — but they're real cash you need at the table, so they belong in your cash-to-close estimate.

The exact amounts depend on your closing date and your insurance and tax figures, which is why they can shift between the Loan Estimate and the final Closing Disclosure.