Which item is NOT typically considered a closing cost on the Closing Disclosure?

Which item is NOT typically considered a closing cost on the Closing Disclosure?

• A. Down payment
• B. Origination charges
• C. Appraisal
• D. Title insurance

Answer: (A)

Closing costs on the Closing Disclosure are the fees charged to obtain the loan and to close the transaction—things like origination charges, the appraisal, and title insurance. The down payment, however, is a portion of the purchase price paid by the buyer at closing and reduces the amount financed. It isn’t a fee charged for obtaining the loan, so it isn’t considered a closing cost. That’s why the down payment is the item that doesn’t fit with the others.

Closing costs on the Closing Disclosure are the fees charged to obtain the loan and to close the transaction—things like origination charges, the appraisal, and title insurance. The down payment, however, is a portion of the purchase price paid by the buyer at closing and reduces the amount financed. It isn’t a fee charged for obtaining the loan, so it isn’t considered a closing cost. That’s why the down payment is the item that doesn’t fit with the others.