Credit Smart HomebuyerU Practice Test

Closing costs include the fees charged by the lender to obtain and finalize the loan, such as processing and underwriting fees. These lender fees are a standard part of closing costs because they are directly tied to securing the mortgage and getting the loan approved.

A home inspection fee is typically paid separately, often before closing, as part of due diligence rather than a lender’s closing cost. The realtor’s commission is usually paid by the seller from the sale proceeds, not by the buyer as a closing cost item. Property tax payments for the first year may be prorated and collected at closing as prepaid items, but they are taxes to be paid to the government, not lender fees.

So the item that is typically included in closing costs is the lender fees.