Question

The chart shows the costs associated with the purchase of a new home.


In the chart, closing costs refers to the

cost of making repairs to the new home.
fees that must be paid to local schools.
costs associated with obtaining the loan.
fees assessed by the state or local government

Answer 1

Answer: Costs associated with obtaining the loan.

Closing costs for the buyer refers to the cost of taking out a home loan and costs associated with owning a home.

Costs of taking out a home loan include costs of origination, processing the home loan and the cost of home inspection, cost of credit report etc.

Costs of owning a home include home insurance, pest infection fees, home owner’s association fees etc.

The chart lists taxes and origination fees separately. Hence the item ‘costs associated with obtaining the loan’ will also be referred to as closing costs

.

Answer 2

Answer:

C - Costs associated with obtaining the loan.