Banks and financial institutions charge fees for creating the mortgage loan. The closing costs generally amount to about 1 to 5 percent of the mortgage but can vary widely between states and types of mortgages. These costs include fees for lawyers creating the paperwork, title insurance, assessment of the property and even mundane services such as shipping the paperwork. Sometimes, the closing costs can be rolled into the price of the mortgage loan, but they are often paid outright at the completion of the sale of the property. The financial institution must provide a list of the fees and an estimate of their costs prior to the final sale. It is important to look these over carefully and ask questions if any items seem to be listed in error or do not make sense to you.