If a property is closing on May 12th, and the first mortgage payment is due June 1st, how will the prorated interest be calculated?

When calculating prorated interest for a mortgage payment due on June 1st, the interest is charged for the period that the buyer owns the property for the month of May, which includes the time from the closing date (May 12th) until the end of that month (May 31st).

Since the buyer takes possession of the property on May 12th, they are responsible for paying interest for the remaining days of the month. In this case, the prorated interest would cover the period from May 12th to May 31st. This aligns with the general practice of prorating expenses based on the ownership duration within a given month, meaning that any interest that applies after the closing date until the first mortgage payment is due must be accounted for.

This situation arises because the mortgage typically accrues interest daily, so it is essential to capture the correct number of days the buyer is responsible for interest before they make their first payment. The other options do not accurately reflect the correct calculation period for prorated interest in this scenario.