Which items typically appear on the Closing Disclosure as closing costs and prepaid items?

• A. Down payment, monthly mortgage payment, homeowners insurance, property tax.
• B. Origination charges, points, appraisal, credit report, title insurance, recording fees, taxes, prepaid interest, and escrow funds.
• C. Taxes, insurance, and HOA dues that are prepaid.
• D. Lender's annual fee, appraisal, and pest inspection.

Answer: (B)

Closing Disclosure is the document that itemizes the costs you pay to close the loan, plus any prepaid amounts that fund future payments. The items listed as closing costs and prepaid items come from charges lenders and third parties impose to obtain and finalize the loan, and to set up the escrow for taxes and insurance. These include origination charges and points (fees to obtain and discount the loan), the appraisal, the credit report, title insurance, recording fees, and taxes, along with prepaid items such as prepaid interest and funds placed into an escrow account for taxes and insurance. In other words, this is the set of line items that represent the costs to close the loan and any upfront payments needed to start the loan, rather than ongoing or purchase-price-related amounts. Down payment and the ongoing monthly mortgage payment aren’t closing costs themselves—they reflect the purchase price and the regular payment schedule, not the closing-cost charges. Taxes, insurance, and HOA dues can appear as prepaid items if paid at closing, but they don’t alone capture the full scope of typical closing costs shown on the Closing Disclosure.