Loan Officer Practice Exam

When preparing a Loan Estimate, where are commissions of real estate brokers or agents listed?

1. Other

2. Prepaids

3. Settlement Charges

4. Loan Terms

The correct answer is: Other

In a Loan Estimate, commissions for real estate brokers or agents are typically listed under the "Other" category. This section is designed to capture costs and fees that do not fit neatly into the more defined categories like settlement charges or loan terms. The "Other" category allows for additional costs that may arise during the transaction process, providing a comprehensive view of the total fees associated with obtaining the loan. While settlement charges would cover more direct costs associated with the closing of the loan, such as title fees and recording fees, the commissions for real estate agents are distinct, as they are generally paid out of the proceeds of the sale and can vary based on negotiation between the parties involved. The other options do not adequately encompass the nature of real estate commissions, which is why "Other" is the appropriate choice for their classification on a Loan Estimate.