What are Closing Costs?

Once a loan is approved and accepted, there are charges known as closing costs. Closing costs consist of points, origination fees, or the discount, cover the cost of setting up the loan. The points are one time charges that are made as a percetage of the loan. Typically points range between 1% and 3% but in states where there are limitations on the interest rates, points can be as high as 7% as a way to get around usury laws.