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

Closing costs encompass a variety of fees and expenses that are associated with the finalization of a mortgage transaction. These costs typically include items that are necessary for the loan processing and transfer of property ownership. Loan origination fees, which compensate the lender for evaluating and preparing your mortgage loan, and title insurance, which protects against potential defects in the title, are both standard elements of closing costs.

Prepaid property insurance payments refer to the upfront costs for homeowners insurance to cover the property, ensuring that it is insured from the first day of ownership. Such prepaid expenses are also included as part of closing costs.

However, the down payment represents a direct contribution towards the purchase price of the home and serves as the buyer's equity stake in the property. Unlike closing costs, which can often be rolled into the loan or included in the financing, the down payment is a critical part of the purchase agreement itself and is therefore not considered a closing cost. Thus, the correct identification of the down payment as something that is not typically included in the closing costs clarifies its distinct role in the home buying process.