On the GFE prepaid items generally are:
12 months of insurance paid at closing (homeowners - fire and possible flood/windstorm where required)
Funding fee for government loans FHA/VA only
interest per deim - days of interest @ xx dollars to end of month
Reserves are always required if the loan to value is 80% or above
3 to 4 months of insurance
NET 3 to 4 months of taxes (approx. - the seller is usually required to pay thier portion YTD as a credit to you at closing) - there shall be an aggregate adjustment completed prior to closing to ensure the investor is not maintianing too much monies in escrow on your behalf.
Example: Insurance is being paid out for 12 months from close date - you close on March 15th, 2009 and your 1st payment is on May 1st (skip April) - the lender has to be sure that before the next March 15th that there is enough monies within escrow to pay your annual insurance premium for 2010. The same situation goes for taxes.