Closing costs are fees associated with finalizing the home purchase and making sure everything is in legal order. These costs run an average of 2-5% of the total loan amount, but the percentages may vary. Some of the fees that make up closing costs include title search, recording fees, credit report, origination fee, and appraisal fee, among others.
The closing process will involve you (the buyer), your real estate agent, the seller, the seller’s real estate agent, and a closing agent—this agent is usually a bank employee or a representative from your title company. At closing you will pay your closing costs and sign all the legal documents that officially pass the home ownership to you—the house’s deed and your agreement to pay back your lender, among other paperwork. The parameters for closing can be a little different depending on if your loan is a traditional fixed-rate versus a different type of loan, like FHA.