In a closing, which payment is typically credited to the buyer as part of closing costs?

• A. Title insurance
• B. Loan origination fee
• C. Earnest money
• D. Recording fees paid by seller

Answer: (C)

Earnest money is the buyer’s good-faith deposit that’s held in escrow and then applied toward the purchase price or closing costs at settlement. Because it’s already been paid, it appears as a credit to the buyer on the closing statement, reducing the cash the buyer must bring to closing. The other items are typical closing charges: title insurance is a cost tied to protecting against title defects, the loan origination fee is a lender charge for processing the loan, and recording fees are closing costs usually borne by the seller or split by agreement, not credits to the buyer.