Closing costs are unavoidable when you buy a home. First-time homebuyers are often caught unaware by closing costs that seem to appear out of nowhere at the end of the process. This is why it's essential to know how much you can actually afford before you go house hunting. That's one area our real estate agents are happy to address.

Closing costs can include many fees that vary, not only by state but by mortgage type and individual lender. These fees are charged by the third parties that provide the services necessary to finalize a mortgage. You can probably expect to pay between 2% and 5% of the purchase price. But what exactly will you get for those added costs?

Whether this is your first real estate transaction or you've done this before, it's important to plan ahead for closing costs. Here are some typical fees you might encounter.

Closing Costs That Might Apply to Your Real Estate Transaction

• Title Search - Research of public records to verify legal ownership, expose liens, or other claims on the property.

• Title Insurance - Although a title search attempts to find all claims on the property, sometimes issues slip through the cracks, such as filing errors or forgeries. Title insurance protects the buyer from issues that may arise at a later date.

• Appraisals -The opinions of unbiased professionals as to the value of the home. Elements they consider include the overall structure, quality of materials, size, and upkeep of both interior and exterior of the dwelling.

• Settlement Fees - Payment to the settlement agent or escrow holder. A neutral third party holds the funds and property until all of the terms of the sales agreement are met, and the transaction can be completed.

• Recording Fees - Fees paid to government entities to register or record the sale of the property. They can include affidavits, mortgages, leases, title transfers, and deeds.

• Land Survey - A process normally required by the lender which verifies the boundaries of the property, the dimensions of the structures, and the presence of easements. If they do exist, be sure you are aware of all of the terms and restrictions.

• Transfer Taxes - Taxes levied by the city, county, or state government on properties as ownership changes. It may be charged as a percentage of the selling price or the value according to the appraisal. Sometimes referred to as a stamp tax, it isseparate and distinct from recording fees.

• Loan Origination Points - Charged by the lender to process a loan application. It will normally fall between 0.5% and 1% of the total loan. For a $200,000 loan, that can be as high as $2,000.

• Home Inspection Fee - The amount can vary widely depending upon the services you request. The purpose is to verify the condition of the structures. You can expect it to cost anywhere from about $400 to $1,200.

Additional Closing Costs to Know

Other common fees include application fees, assumption fees,and prepaid interest. Chances are, not all of these fees will apply to your transaction. Before closing, the lender will provide you with the closing disclosure, which itemizes each cost.

The good news is, you don't have to be an expert on the ins and outs of closing costs. An experienced real estate professional can help represent your interests in these complex transactions and help you understand closing costs.

You're sure to find such an agent at Better Homes and Garden The Masiello Group. Contact us for help understanding every part of your next real estate transaction.