Buyers should be prepared for shock of closing costs

First-time buyers tend to overlook closing costs. But typicallyyou can expect to pay 4 1/2 percent of the loan amount in variousloan fees. This can drastically cut into your down-payment nest egg.

The largest closing cost usually is points, or special loan feeslenders charge to increase their profits.

One point equals 1 percent of the mortgage amount. So if alender charges three points on a $90,000 mortgage, you will have topay $2,700 at closing.

Some lenders will lower the interest rate on a loan if you willpay more points at closing. It is unusual today to find a lenderwilling to charge no points without raising the annual rate. Also,if you want to …