Which of the following is NOT typically included in closing costs?

Which of the following is NOT typically included in closing costs?

• A. Loan origination fees
• B. Title insurance fees
• C. Homeowner's insurance premiums
• D. Monthly mortgage payments

Answer: (D)

Closing costs encompass various fees and expenses that buyers incur when finalizing a real estate transaction. Loan origination fees and title insurance fees are common components of these costs. Loan origination fees are charged by lenders for processing a new loan application and servicing the loan. Title insurance fees protect against any issues related to ownership rights of the property and are crucial for ensuring a clear title transfer. Homeowner's insurance premiums, while often required by lenders, are typically paid upfront during closing as part of the overall transaction costs, ensuring that the property is protected from potential damages immediately upon closing. In contrast, monthly mortgage payments are not a part of closing costs. Instead, they are ongoing expenses incurred after the close of the transaction, representing the repayment of the mortgage loan along with interest and, possibly, property taxes and homeowner's insurance on a monthly basis. Therefore, the selection of monthly mortgage payments as an option that is not typically included in closing costs is accurate, as it represents an ongoing financial commitment rather than a one-time transaction cost.

Closing costs encompass various fees and expenses that buyers incur when finalizing a real estate transaction. Loan origination fees and title insurance fees are common components of these costs. Loan origination fees are charged by lenders for processing a new loan application and servicing the loan. Title insurance fees protect against any issues related to ownership rights of the property and are crucial for ensuring a clear title transfer.

Homeowner's insurance premiums, while often required by lenders, are typically paid upfront during closing as part of the overall transaction costs, ensuring that the property is protected from potential damages immediately upon closing.

In contrast, monthly mortgage payments are not a part of closing costs. Instead, they are ongoing expenses incurred after the close of the transaction, representing the repayment of the mortgage loan along with interest and, possibly, property taxes and homeowner's insurance on a monthly basis. Therefore, the selection of monthly mortgage payments as an option that is not typically included in closing costs is accurate, as it represents an ongoing financial commitment rather than a one-time transaction cost.