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Closing Costs & Points Explained

One of the great mysteries of home buying, at least to those who have never been through the process, is closing costs. While nearly everyone has heard of them, few who haven't had to pay them really understand them. Even some people who have paid them aren't sure what they spent all that money on.

Closing costs are the various fees that a homebuyer must pay before the mortgage lender will finalize the mortgage. Generally speaking, these costs are about 3 to 6 percent of the amount borrowed. That is in addition to your down payment. Following are some of the components of your total closing costs.v The lender will charge an application fee to cover the costs of completing your mortgage application. This may or may not include the fee for your credit report. They will also charge a loan origination fee, also known as points. This covers the administrative costs of processing your mortgage. One point is equal to 1% of the total amount loaned.

Many lenders offer the option to purchase without points, but keep in mind that this will result in a higher interest rate. There are also lenders who will let you pay additional points to lower the interest on your loan.

Title insurance will be required by your lender. This protects you and the mortgage company in case the seller does not have the legal right to sell it. There could be unknown co-owners of the property, or it could have an unpaid lien against it that would prevent the seller from legally selling it.

An appraisal is also required by lenders. This is to ensure that the home is worth the amount loaned to you to purchase it. A home inspection is not usually required, but it's a good idea to have one. The cost of the inspection could also be considered part of closing costs.

Homeowners insurance is a standard requirement of mortgage lenders. They will require proof of it and may require you to pay the first year's premium before closing. Private mortgage insurance may also be required depending on the amount of your down payment, and part of the fee will be included in your closing costs.

Taxes associated with the transfer are usually the buyer's responsibility, unless other arrangements are agreed upon. You may also have to pay for a survey of the property. You will likely be required to pay the interest accrued between the time your mortgage was originated and the due date of your first payment. Attorney and notary fees may also be a part of your closing costs.

Closing costs are comprised of all of the expenses that must be paid before the purchase of your new home is finalized. Points are a fee charged by your lender that may be somewhat flexible and directly affect your interest rate. Knowing what these terms mean and what fees they consist of can help you be more prepared for them when the time comes.


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Katie did an exceptional job when helping me purchase my first home! Once I found the house I liked, she was quick to get process going which is especially important in this... read more...

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Todd's reputation as the "go to" professional in this area is well deserved.
I had the pleasure of having Todd represent me in the sale of my late father's house in... read more...

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Katie was great to work with in our home buying process. She was very responsive, knowledgeable, flexible, and always on time! She made the process easier, and made sure... read more...

There aren’t enough superlatives to describe Todd Sandler and the work he did for me. Todd assisted me in selling a family home. His support throughout the process was... read more...

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Katie - Very Good Negotiator!
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Your Assitance and Guidance
Kim and Peter, We wanted to send a note of appreciation. Thank You for your assistance and guidance throughout the whole process. We truly... read more...

Highly recommend Todd Sandler and his firm!
It is without reserve that my family and I highly recommend the services of Todd Sandler and his firm. After each showing, Todd... read more...

Couldn't find a better Real Estate Professional than Katie!
Katie has helped my husband and me find our first home. Being total 'Newbies' to this process, we couldn't have... read more...

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Todd Sandler was great working with us throughout our purchase process. Timely communication, ethical and honest in our dealings, it was a... read more...

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Katie was awesome, as everyone knows selling and buying a home is a stressful experience. Katie had her work cut out with me as a... read more...

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Katie was very helpful during the process of selling and buying our home! She was always available when we needed her and she made a... read more...

Thank you Todd!!
Last fall my family was struck with a difficult situation which resulted in us moving and selling our house. I had never sold a house so I didn’t even... read more...

You have a Great Team!
Todd, I want to thank you again for selling my house! You have a great team over there. Steph and I are thrilled with our new place and that was... read more...

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True Professional!
Dear Kim, We just want to say "Thank You" again so much for all the wonderful work you did on the sale of my house.
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My wife and I came in contact with Katie Hynes of Todd Sandler Real Estate Agency when we were planning to sell our house. We were very... read more...

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Your Professionalism
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Dear Todd, Thank you so much for all you have done in two, not just one, of our moves over the past six years.

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Hi Kim, I want to say "thank you" for all your efforts on our behalf regarding the sale of our mother's house in Holbrook. You... read more...

Knowledgeable Agents!
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Todd,
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Hi Kim - We just wanted to send out this quick note to thank you, as well as express how much we REALLY appreciate all of your hard... read more...

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I know how hard you Worked!
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Many Thanks!
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Thank You!
Dear Kim - Thank you very much. The house is nice. The home is warm. We feel comfortable. You're appreciated.

Recommendation
Dear Todd: Over the past twenty years I have recommended you to friends either wanting to buy or sell a home in Randolph. The feedback I often received was... read more...

Thank You!
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Thank you for Selling Our Home
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