Prepaid interest

prepaid interest
interest paid in advance of the time it is earned. Prepaid interest is not tax deductible. An exception is for customary points paid by a borrower on the initial mortgage to purchase a principal residence.

prepaid interest: interest paid in advance of its due date.
prepayment penalty: a charge that may be levied against somebody who makes a payment before its due date. The penalty compensates the lender or seller for potential lost interest.

Prepaid interest
An asset account showing interest that has been paid in advance, which is expensed and charged to the borrower's P & L statement.
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Prepaid Interest: Prepaid interest is the payment of advanced interest on a loan.

Prepaid Interest
Interest that is paid before it is due to save the borrower money on taxes.

Prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g., two points on a $100,000 mortgage would cost $2,000).
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Prepaid Interest (finance term)
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Prepaid interest
Interest that a borrower pays before it is due, usually to save taxes.
Prepayment penalty ...

Prepaid interest is tax deductible in most cases, and your long-term interest rate will be lowered slightly - often 0.25% or 25 basis points - for each point you pay.

Points: Prepaid interest a borrower pays to a lender at closing. A point equals 1% of the total principal of the loan. For example, on a $100,000 mortgage four points would cost a borrower $4,000.
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In this case, points - also called discount points - are prepaid interest some lenders require at closing as a condition of approving the loan. One point is 1% of the mortgage principal, or 100 basis points.

At the settlement or closing on a new home loan, it's common for the buyer to be charged a small amount of "prepaid interest.

A bankruptcy in which a debtor and its creditors pre-negotiate a plan of reorganization and then file it along with the bankruptcy petition.
Prepaid interest ...

prepaid interest The interest paid before it is earned. prepayment The payment of all or part of a debt preceding its due date. prepayment penalty A penalty sometimes burdened on a borrower who makes a prepayment.

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