It's a term that is thrown around all the time when calculating the cost of buying a home. But I always have friends and clients wondering what exactly are closing costs. In essence, closing costs are usually a wide range of fees necessary when buying a house. These are some:

Lender fees: this fee consists of courier fees, appraisal costs, administrative fees, processing fees, a credit check, transfer taxes, underwriting fees, etc.

Title fees: title search, title insurance, settlement services, etc.

Prepaid costs: think homeowner's insurance and property taxes