The checklist to buy a home could go on for a long, long while. From finally locating the right home to employing the services of a home inspector, the to-do list may at times seem never-ending.

There is one part of the home buying process that's frequently confusing as well as being overlooked: closing costs. These are a part of every real estate transaction and prospective home buyers need to know precisely what these costs are made up of to ensure you are actually ready. What Are Closing Costs?The fees connected with closing can include:The title company for dealing with the documentsSettlement Closing agents or Attorneys City government for recording the deedState licensed appraisersLand surveyorsAnd any other necessary service in the process

Becoming a home owner will probably be the biggest transaction of your life. Wouldn't you want to be sure that all procedures are handled by experts so nothing goes wrong? Considering the amount of money involved it is a transaction you don't want screwed up by amateurs.

How Much Are Closing Costs?According to licensed real estate experts and studies, home buyers commonly pay approximately 2 to 5 percent of the home's purchase price. You should understand that the total costs will be driven a lot by the:Loan amountType of Mortgage ProductProperty Type City, county and state

Borrowers will receive a loan estimate once their loan application is submitted, which will provide you with an approximate cost of how much the closing costs could be and what to expect so there's no surprises. Origination Fee - Generally varies from 1% to 2% of the loan amount or zero depending on the loan program.Discount Fee - Optional, ranges from 1 to 2% of the loan for borrower to reduce the interest rateCredit Report Fee - Costs $50 or more if credit supplements and re-scoring are needed.Appraisal Fee - Costs between $450 - $750 for a single family dwelling.Property Inspection - Inspector fees usually varies from $300 to $1,000.Property Survey - If required, usually costs $200 - $400.Settlement & Legal Fees - varies $600 - $2,000 depending on the transaction.Title Search - Fees can vary greatly, but are approx. $125 - $200.Title Insurance - The cost can vary, but it usually about .125% of the purchase price of the home.Homeowners Insurance - Ranges from $400 and up.Prepaid Interest - Estimate the interest from the day of closing to the end of the first month you own the property.Escrow Fees (or Closing fee) - This is paid to the title company, escrow company, or attorney for conducting the closing.Condo certification - ranges from $150 to $300 paid to the condo associationRecording Fees - Varies from $150 - $400.Valuable Tip: Try to make sure your closing occurs as close to the end of the month to reduce your fees because your interest is determined by the number of days left in the month.

Who Pays for Closing Costs?The home buyer commonly pays their share of closing costs and the seller their share. so, essentially it is 50/50. The buyer's agent can request the seller take care of all or some of the fees, but this may hurt your offer in a strong demand housing market.

In certain circumstances, the buyer can pay no closing costs at all. This is known as a no-closing cost mortgage. This mortgage frequently possesses a higher interest rate. This means you'll be paying more interest on the loan overall, but the closing costs will not be a concern, only your down payment, inspection, and appraisal will be coming from you.