Prepaid interest on a mortgage consists of monies taken in at loan closing and is generally calculated for the odd number of days to the end of the month. 

Review links below for more information for information on applying prepaid interest properly on a morgage loan.  This interest is applied on a date decided by the credit union.  A recommended date would be the last day of the month, unless it is a Freddie Mac loan, in which case it has to be the 15th.