While it’s true that mortgage interest rates are at historic lows, buying a house isn’t necessarily as cheap as you may think

Though interest rates are vital in determining how much money you’ll pay over the life of your mortgage loan, the actual transaction of home buying involves many extra fees. Namely, closing costs.

It’s essential that you stay on top of your closing costs so you don’t get hit with thousands of dollars in upfront fees. Find out how to chew on your closing costs using the tips below.

Ask for full-disclosure of all fees

When you get a Good Faith Estimate from a lender (usually given three days after you submit a loan application), review the full estimate to see if it includes closing costs. Be direct with your lender and verify that all closing costs have been disclosed to you in the Good Faith Estimate. If you’d like, get your lender to sign a statement validating this fact.

The main reason to be wary of full-disclosure on all upfront fees is because that part of the industry is not regulated. Using financial jargon and legalese, mortgage lenders (the crooked ones, anyway) all too often stick hidden fees into your final closing package.

Some instances of hidden fees can cost you as much as $1,000 – $3,000 extra in closing costs – if not more.

The U.S. Department of Housing and Urban Development (HUD) is currently working on new regulations that will simplify the mortgage application process. Their goal is to protect consumers from getting hit with heavy fees when closing on a house – particularly being that it’s difficult to negotiate when in such a position.

Unfortunately, the timeframe for these regulations has yet to be defined.

Second-guess the fees you’re being charged

You already know to make sure you look for fee listings and to ask your lender for validation that all fees have been disclosed. But once all fees are out in the open, take the time to survey them to see whether they appear legitimate.

If there are any fees listed that you don’t fully understand, ask your lender to explain the rationale behind each fee. There are currently more than a dozen different types of fees that may or may not show up on your final closing statement. Some are essential to the way lenders do business while others are simply unnecessary.

Some of the more common closing fees are appraisal fees, document preparation fees, recording fees, title fees, underwriting fees, and credit report fees.

If your credit is good and your application for a mortgage loan is sound, you might consider challenging any fees that seem excessive. Some fees may turn out to be negotiable. Just know that many lenders don’t actually control the fees that show up on a loan statement.

Closing fees aren’t the only final fees you’ll pay

Don’t forget that buying a house entails several other types of final fees that have nothing to do with your closing costs or your lender. You’ll still have to take care of various out-of-pocket costs such as property taxes, homeowners insurance, and state mortgage taxes.

Be prepared for the final tab

Your final tab at closing could very likely be many times more than you initially estimated. Because of this, it’s important to have a contingency plan that allows you to access additional financial reserves should you need them. You don’t want to risk losing your dream house because you weren’t able to round up a few extra hundred dollars.

Don’t lose sight of your interest rate

While it’s important to be aware of the scams and overcharges that surround closing costs, it’s also important to keep the big picture in mind. With or without high closing costs, you should still set your sights on getting the lowest mortgage interest rate possible.

In fact, many people mistakenly think that the difference of a few tenths of a percentage point on their interest rate will hardly have an effect on their total mortgage price. Yet even a difference of four tenths of a point on your interest rate, when compared to other interest rates, can cost you tens of thousands of dollars in interest in the long run.

It’s a good idea to consider paying a point or so up front in order to lock in the lowest rate possible. Just be sure you’ll be staying in your new house long enough for the savings in interest to make up for the points you paid upon closing.

Get creative with your financing if necessary

A final option for taking care of closing costs is to roll those costs into your overall mortgage loan. If you choose to do this, make sure you first consider how much extra you’ll pay each month on your mortgage and don’t forget to look at the added interest you’ll pay over the life of the loan. If you’re short on cash, such a move may be worth it if only to lock in a low mortgage interest rate.