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What is Section F on a Loan Estimate?
Updated November 2026 · Every dollar figure is an illustrative example, not a quoteSection F, Prepaids, is money paid at closing for things that have to be in place before your first mortgage payment: the first year of homeowner's insurance, any mortgage insurance collected ahead, the interest from the funding date to the end of the month, and any property tax bill due before you start paying. None of it is a lender fee, and all of it is an estimate that can change with your closing date and your insurer's real quote.
Where it is on the form
Page 2, right-hand column, under Other Costs, below Section E. Four lines on the model form: Homeowner's Insurance Premium (__ months), Mortgage Insurance Premium (__ months), Prepaid Interest ($__ per day for __ days @ __%) and Property Taxes (__ months).
A year of homeowner's insurance is the largest line on most estimates, $1,200 to $3,000 and far more in high-risk areas. Prepaid interest is from a few dollars to a month's interest depending on the closing date. Mortgage insurance appears only when months of premium are collected ahead (an FHA upfront premium or VA funding fee is a Section B charge, not a prepaid), and property taxes only when a bill is due soon.
The lines in F. Prepaids
| Line on the form | Paid to | Illustrative range |
|---|---|---|
| Homeowner's Insurance Premium | Your insurance company, often directly by you before closing | Often $1,200–$3,000 a year; much more in high-risk areas |
| Mortgage Insurance Premium | The FHA, a private mortgage insurer, or for a VA loan the Department of Veterans Affairs (as a funding fee) | FHA upfront premium 1.75% of the base loan; conventional single-premium PMI often 1%–3% of the loan; VA funding fee commonly 1.25%–3.3% of the loan |
| Prepaid Interest | The lender | Per-day interest × days left in the month; from a few dollars to a full month's interest |
| Property Taxes | The county or other taxing authority, through the settlement agent | Usually $0 in Section F; where a bill is due, up to a full installment |
Section F is why cash to close is a worse comparison between lenders than it looks. One lender assumes a closing on the 1st and a $2,500 insurance policy; another assumes the 25th and $1,500. The second estimate shows about $2,900 less cash to close with no difference at all in the loan. Compare the rate and Section A between lenders; use F to plan your cash.
The word 'prepaid' is the clue to all four lines: each is something you pay now that would otherwise have been paid later. The insurance would have been paid at renewal, the interest in the first payment, the taxes at the next installment. They are not costs of the loan; they are costs of owning a home, collected early.
Can you shop for it?
The insurance premium, yes: you choose the insurer and the policy. Prepaid interest, through the closing date. Mortgage insurance and property taxes, no. Section F is where your own choices, not the lender's, move the number.
Can it change between the Loan Estimate and closing?
No tolerance limit for any line. Prepaids are expressly outside the tolerance rules, because they depend on your insurer, your closing date and the county, not the lender. The Closing Disclosure shows the real figures. A lender still has to estimate in good faith, with the information it has.
Questions to ask the lender
- What closing date and what insurance premium did you assume in Section F?
- Is any upfront mortgage insurance or funding fee in Section B, and is it paid in cash or financed into the loan amount?
- Is any property tax installment due between closing and my first payment?
Red flags
- An insurance premium estimated far below what insurers quote in the area, which understates both cash to close and the monthly payment.
- Prepaid interest computed at a rate other than your locked rate.
- A Section F that is unusually small on one estimate compared with another, used to make that lender's cash to close look better.
Questions people ask
What is the difference between Section F and Section G?
F is money paid now for things due soon: the first year's policy, the month's interest, a tax bill. G is money deposited into the escrow account so the lender can pay next year's insurance and the next tax bills when they come. F is spent; G is yours, held by the servicer.
Can Section F change at closing?
Yes, freely. Prepaids have no tolerance limit because they depend on your closing date, your insurer and the county. The Closing Disclosure shows the actual figures. A lender still has to estimate them in good faith.
Is Section F negotiable?
Not with the lender, since none of it is the lender's money. But you control two of the four lines: pick a cheaper insurance policy, or close later in the month. Those two choices can move Section F by thousands.
Only have one quote? That's the problem.
Tell us the rate and the fees you were quoted. It is free, there is no credit pull, and nobody calls you. We check whether another lender beats it, fees included. Or start with the free Loan Estimate checker, which reads your rate, points and Section A and flags anything out of the ordinary.
Check my quoteEvery dollar figure on this page is illustrative. Fee ranges are general observations, not a survey or a quote, and are not a loan offer, approval, commitment to lend, or Loan Estimate. Your actual rates and fees depend on qualification with lenders, your state and county, and your closing date. The tolerance rules described are the federal TRID rules in general terms; the rule itself and your own Loan Estimate and Closing Disclosure decide how it applies to your loan. comparemyloan does not negotiate with lenders, lock rates, or take loan applications.