Buying a home doesn't have to be a complicated undertaking. The more you know about ahead of time, however, the less complicated the process will be. One major issue many first-time buyers are caught unaware of are closing costs. This issue deserves some serious thought and you should understand what is involved before you make an offer on a home. To find out more, read on.

Prepare Ahead for the Costs

The closing brings not just the keys to your home but a need for cash. The ability to close the deal pulls together several elements that all must work together to make the closing a success. One missing element could make the entire deal fall through or at least be delayed by weeks. Your lender will verify your ability to pay closing costs based on a certain sum of money in your bank account as part of the underwriting process. That means your loan won't be approved until you show you have the funds on hand for the closing. Once you sign a purchase agreement, you will have a general idea of the closing costs and that figure will become final a week or so before the closing date. In the meantime, take a look at what you can expect in terms of closing costs.

What to Expect With Closing Costs

The exact amounts vary by location, the cost of the home, and your particular agreement with the seller. For example, some sellers incentivize the deal by offering to pay certain closing costs normally borne by the buyer. In general, Zillow advises that buyers can expect to pay between two and four percent of the purchase price of the home, in most cases. Of that sum, the following expenses may be charged:

1. Escrow and service fees to the company holding the closing.
2. Taxes owed to the municipalities for a partial month between the closing and your first escrow payment.
3. Points on your lending, which is a fee for lending on top of the interest you will pay.
4. Title insurance pays for the research performed to verify a clean title to the property and for insurance on that title going forward.
5. Recording fees are due to the county as part of filing the property deed.
6. Notary fees to have documents notarized.
7. Some ongoing fees have to be paid at the closing and then will be included in your mortgage payment thereafter. These include homeowner's insurance, property taxes, miscellaneous insurance costs like flood and hurricane riders, property taxes, private mortgage insurance, and prepaid interest.

To find out more about these and other closing costs, speak to your real estate agent about the single-family homes for sale in your area.