Closing costs are all of the expenses that both a buyer and a seller incur when transferring ownership of a home. These costs are in addition to the price of the property and normally include any attorney and escrow fees, property taxes, and interest payments, as well as title and mortgage insurance charges, sales commission, credit report costs, and termite inspection fees.

An escrow account is a savings account that's set up by a lender when you take out a mortgage. Its purpose is to allow you to set aside a portion of your monthly mortgage payment to cover the costs of annual fees like property taxes and homeowner's insurance premiums.

During the final weeks before closing, you should be prepared to know that anything may happen to prevent the final sale of the house. As a result, it's strongly recommended that you perform some important activities to ensure the transfer of the home takes place properly.

When closing on the purchase of a home, you should be familiar with three types of insurance. The first is title insurance. Title insurance protects the homebuyer and the lender against any claims that may arise from disputes about the ownership of the property.