Oregon 30-Hour Real Estate Law Practice Test 2026 – Complete Study Resource

The correct answer is that credits and debits are typically included on a closing disclosure. A closing disclosure is a critical document required in real estate transactions, as it outlines the final terms and costs of a mortgage. This document provides a detailed accounting of the money flowing into and out of the transaction for both the buyer and the seller.

Credits represent funds that reduce what the borrower owes, such as earnest money deposits or seller concessions. Debits, on the other hand, are charges that can add to the borrower's total costs, including loan fees, appraisal fees, and closing costs. By clearly listing these credits and debits, the closing disclosure ensures that all parties understand the financial implications of the deal before finalizing the transaction.

Other options, while related to real estate transactions, do not form fundamental components of a closing disclosure. Estimates and summaries, while useful in understanding costs, do not provide the detailed breakdown necessary for a closing statement. Contracts and terms are essential for defining the transaction but are not specifically required components of the closing disclosure itself. Lastly, fees and penalties may apply during the life of a loan, but they are not explicitly included in the closing disclosure which focuses on the immediate financial picture at closing.