Closing costs are expenses that come with the mortgage loan processing process and are paid at the time of the closing of the real estate transaction. They are expenses over and above the propertys price that buyers and sellers incur to complete a real estate transaction. Closing costs typically range from 2% to 6% of the loan amount. The specific closing costs you’ll need to pay depend on the type of loan you take and where you live. Here are some examples of what closing costs may include:

• Loan origination fees: This fee goes to the lender for creating your loan.
• Appraisal fees: This fee covers the cost of a professional appraisal of the property.
• Title insurance: This fee covers the cost of researching public records to make sure the person selling the property is the legal owner.
• Attorney fees: Some states require you to have an attorney. Their fees may be bundled into your closing costs or paid separately as a flat fee.
• Taxes: This includes property taxes and transfer taxes.
• Insurance: This includes homeowners insurance and mortgage insurance.
• Record filing fees: This includes the cost of registering your purchase with the local government.

Closing costs must be disclosed by law to buyers and sellers and agreed upon before a real estate deal can be completed. Its important to note that closing costs dont include your down payment, but you may be able to negotiate them.