What is typically not included in a buyer's closing costs?

In real estate transactions, closing costs can encompass a variety of fees and expenses that the buyer incurs when purchasing a property. While loan origination fees, title insurance premiums, and property assessment taxes are commonly included in the buyer's closing costs, a home warranty plan typically is not considered a necessary expense at closing.

The loan origination fee is a charge by the lender for processing the mortgage application, and title insurance protects the buyer against any future claims on the property. Property assessment taxes are governmental charges based on the property's value and are often due at closing.

A home warranty plan, on the other hand, is an optional service that provides repairs or replacements for home systems and appliances due to normal wear and tear. Buyers can choose to purchase this plan for added protection, but it is not a requirement and is often viewed as an additional expense rather than a standard closing cost.

Understanding the difference between mandatory closing costs and optional services like home warranties can help buyers budget properly and anticipate the financial responsibilities associated with their home purchase.