It's very common to see a purchase contract with provisions for prorations. This type of contract should be read closely and you should understand the prorations before signing. It may even be necessary to request a change to the verbiage used for the prorations.
Most of the time, the buyers are the ones responsible for the prorations. These changes will often show up as a debit on the closing statement for the buyer and will be a credit on the sellers closing statement.
Prorations usually increase the net profits of the seller and they cover items which were prepaid by the seller for a time when the seller won't own the property.
Prorations for Mortgage Interest
Sometimes, you will need to understand what the mortgage interest…