Definitions of words and terms you often hear when buying or selling a home. Closing Costs Costs and fees associated with the change in ownership of a property and with a mortgage that are assessed at the legal closing or settlement. A point equals one percent of the principal amount of a mortgage.
Lenders frequently charge points to increase the yield on the mortgage and cover closing costs.
Points usually are collected at closing and may be paid by the borrower or the home seller or may be split between them. This insurance permits the buyer to purchase a home with a lower down payment and the lender to lend a higher percentage of the sale price. Purchase Agreement A written contact signed by the buyer and seller of real property which sets forth the price, and other terms and conditions under which a property will be sold. Mortgage Interest Money charged for the use of cost of borrowing money. Hazard Insurance Real Estate insurance protecting against loss caused by fire, some natural causes, vandalism, etc.