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DictionaryThe buying process

Proration: what it means

Proration is the split, as of the closing date, of home expenses that cover a period of time, such as property taxes, homeowners association (HOA) dues or utilities the seller used. If the seller already prepaid part of a period when you will be the owner, you reimburse the seller at closing.

In Spanish it is

Prorrateo

Also written as: prorations · closing adjustments · prorated taxes

The full explanation

If the seller owes taxes for their time that you will pay later, the seller gives you a credit at closing. The Closing Disclosure shows each prorated amount along with the dates it covers.

An example

The seller had already prepaid the county taxes. Omar's Closing Disclosure shows what he pays her back for the months when the home will already be his.

You will see it in…

  • The Closing Disclosure, page 3: “Adjustments for Items Paid by Seller in Advance”
  • The Closing Disclosure, page 3: “Adjustments for Items Unpaid by Seller”
  • The “City/Town Taxes,” “County Taxes” and “Assessments” lines, with the dates they cover

Words that go with it

You will rarely see this word alone. These are the ones that show up with it on the same papers.

More guides that use “proration”

More words on this topic: The buying process

A pregnant woman reads paperwork on the sofa while the grandmother plays with the girl on the floor.

Still confused by a paper?

A HUD-approved housing counselor can walk you through it. Agencies usually charge little or nothing, many work in Spanish, and they do not sell you anything.

What a housing counselor does See free help

Official sources

We sum up what these official sources say, in plain words. We add no rules they do not state; when a rule changes, the definition and its date change.

  1. 1. CFPB (Regulation Z) · 12 CFR 1026.38(j)-(k) and official interpretation (Regulation Z): summaries of transactions and adjustments · in English · Verified on October 17, 2026
  2. 2. CFPB · Closing Disclosure explainer: adjustments for items paid and unpaid by seller · in English · Verified on October 17, 2026