Closing costs (sometimes called escrow costs) are typically all the costs or fees and services associated with completing a real estate transaction in addition to the down payment. As a buyer the total amount you will have to pay to complete a real estate purchase are the down payment plus the closing costs. Some of the items associated with closing costs are:

• Title Insurance Premium. Fees paid by the buyer for an owner's policy to insure the title is marketable and for a lender's policy to insure their lien position.
• Real Estate Commission. Fee paid to a real estate broker for services rendered in listing, showing, selling and consummating the transfer of property. The seller usually pays this fee.
• Transfer and Assumption Charges. Fees charged by a lender to allow a new purchaser to assume an existing loan. This is only applicable if you are assuming an existing loan.
• Recording Fees. Fees assessed by a county recorder's office for recording the document of a real estate transaction.
• Loan Fees. Fees charged by a lender in connection with the processing of a new loan. These may include fees for loan origination, loan points, document preparation, property appraisal, administrative support, and credit report. The loan origination fee is a mortgage broker charge for securing a loan. Points are fees the lender charges to provide you a particular mortgage interest rate (sometimes called the discount fee). A point is 1% of the loan amount (e.g., the loan fee on a $200,000 loan at one point is $2,000). When shopping for a mortgage be sure and ask the mortgage broker or lending institution for there par mortgage rate. This is the rate with zero points and is a good reference to consider when deciding whether to pay points to secure a lower rate loan.
• Escrow Fees. Fees charged by a title and/or escrow company for services rendered in preparing documents necessary in the consummation of a real estate transaction. This fee is negotiable between buyer and seller.
• Additional settlement costs. These costs include, but are not limited to, taxes and insurance impounds, interest prorations, termite inspection fees, other inspection fees, and tax prorations. These costs are prorated between the buyer and seller depending on the escrow instructions and on instructions from the lender.

Title or escrow company personnel will review and explain your closing statement when you prepare to close your transaction and take ownership of your new home.

How much are closing costs?

Closing costs vary for every transaction. You will want to work closely with your realtor, to determine the closing costs for your transaction. Your realtor should provide you an estimated Sellers Net Proceeds Sheet, or a Buyers Estimated Closing Cost Sheet for your transaction. Below is a sample of what expected closing cost could be and how it equates to your transaction.

This table is organized similar to a statement you will receive upon the close of your escrow on your property purchase. It's called a HUD-1 Settlement Statement/Closing Statement and is required by the U.S. Department of Housing and Urban Development.