It's easy to get caught up in the excitement of a home purchase. After months of searching (and perhaps a few disappointments), your offer was accepted and your lending is about to be approved. Your financial obligations don't end with the down payment and a loan approval, however. If you don't take buyer closing costs into consideration, you could end up delaying the closing and the entire deal could fall apart. Read on for an idea of what is expected of buyers at the closing table in terms of cash payments.

The Importance of Planning Ahead

Knowing about closing costs well ahead of time is important. Some lenders won't approve a mortgage without the buyer showing they have enough cash in a bank account to close. The amount needed varies but can be estimated based on the purchase price of the home. Most experts advise buyers to count on paying closing costs of anywhere from 2 up to 4 percent. The average home price in the US stands at $226,800. A home at that purchase price could incur closing costs of about $4476.00 up to about $9072.00. You might not know the exact amount of your closing costs until a few weeks before you close, but an estimate is often provided to buyers when they sign the purchase agreement.

What Makes Up Closing Costs?

There are really two categories of closing costs. You pay certain costs once and never again. There are some you pay at the closing but that becomes part of your recurring housing expenses. Here is a list of common closing costs in both categories:

• Closing or Escrow Fees – Paid to the title company or business conducting the closing.
• Lending Fees – Also known as points.
• Transfer Taxes owed to the State, County, and City
• Title Insurance Policies – This fee pays for the title research on the property and provides insurance against anyone coming forward and laying a claim on the property.
• Miscellaneous Notary, Wire Transfer, Delivery, Courier Fees
• Recording Fees – Goes to the county as payment to record the property deed.
• Home Maintenance Plans – These optional plans pay for unexpected repairs on the home going forward.

Fees you can expect to be recurring are homeowner's insurance, special insurance policies like flood or hurricane coverage, property taxes, mortgage insurance, and prepaid interest. Closing costs are not a well-kept secret. Speak to your real estate agent to get an accurate estimate of what to expect on the day of the closing.

For more information, you will want to contact a company such as RE/MAX Gold.