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Closing Costs are costs incurred when securing a real estate mortgage.

Major Closing Costs include Application, Processing, Underwriting, Title, Document Preparation, Attorney, Appraisal, and Recording fees. Plus ...

ACCRUED INTEREST
If the loan's first payment will have a due date beyond 30 days from the closing date of the loan, expect to prepay a per diem charge to cover accrued interest for those extra days.

ESCROW ACCOUNT
If the lender will be paying taxes and hazard insurance from an escrow account established on the borrower's behalf, expect to prepay 2 to 3 months' charges for those items as a closing cost to seed the escrow account.

PMI (PRIVATE MORTGAGE INSURANCE)
If the down payment is less than 20%, the buyer may be required to prepay some Private Mortgage Insurance (PMI) premium charges.

HOMEOWNERS INSURANCE
While not a closing cost in a strict sense, be prepared to bring to closing a receipt showing payment in full for one year's hazard insurance.

WHAT TO EXPECT
All in all, be prepared for about $2,000 in closing costs, plus prepaid charges.

SHOP AROUND
Are these Closing costs negotiable? Probably not, but they do vary from lender to lender, so ask potential lenders for a detailed breakdown of closing costs so you can make a meaningful comparison among lenders.