Which of the following costs is classified as a prepaid category of borrower costs?

The classification of costs as prepaid borrower costs typically refers to expenses that are paid upfront at closing for services that will benefit the borrower over a period of time. In this context, the annual premium for homeowner's insurance required at closing is indeed a prepaid cost. This expense is paid upfront to secure coverage for the home from the moment the loan closes, ensuring that the property is insured almost immediately, which is a requirement for most lenders.

The other options listed do not fit the classification of prepaid costs in the same manner. For instance, the credit card charge for the appraisal might be an upfront cost, but it is typically not classified as prepaid in the same context as the insurance premium. The lender's requirement to place property tax reserves in escrow is more of a reserve or cushion for future expenses and not a payment for immediate benefit. The cost of title insurance benefits the lender as protection against title defects, but it is not something that is prepaid by the borrower in the same way that the homeowner's insurance premium would be.