One of the most important fees when purchasing a home is the closing costs. Both the buyer and the seller are responsible for these costs, which arise when a property changes hands. Anyone looking to buy a property in Florida, or anywhere else for that matter, would do well to take the time to familiarize themselves with the various closing charges involved. Learn more about what to expect and how to figure out your share of the closing costs in Florida by reading this article.
The Closing Process and Its Expenses
When buying or selling a home, there are some costs that must be paid at the closing table. These expenses might fluctuate substantially depending on a number of variables, such as the location and nature of the home, the lender you choose, and the mortgage conditions. The normal range for closing fees is 2-5% of the total loan amount.
Florida Closing Expenses on Average
Lenders will typically charge borrowers loan origination fees to cover the costs associated with originating a loan. They average around one percent of the principal borrowed.
The cost of getting an appraisal done to ascertain the property’s market value.
The cost that your lender incurred to pull your credit report is known as a credit report fee.
Title Search and Insurance Costs: These are the costs incurred to check the property’s title for any encumbrances or problems and to secure title insurance.
Escrow Fees: These are the costs assessed by the escrow service for its role in receiving, safeguarding, and releasing the monies.
County or local government: They will assess recording fees in order to legally document the sale of property.
Costs associated: with commissioning a survey to establish the legal limits of the property.
Legal Costs: which include the cost of hiring an attorney to look through the paperwork and make sure it’s all in order from a legal standpoint.
Property Taxes: These are the taxes that the buyer is responsible for paying for the number of months that they will actually own the property.
The cost of a homeowner’s insurance policy for one year is included in this estimate.
Private Mortgage Insurance (PMI): You may be required to pay PMI if your down payment is less than 20% of the purchase price.
Costs related to joining or paying the first month’s or year’s dues to a homeowners’ association (HOA) may apply if the property is part of such an organization.
Florida Closing Expenses and Their Estimation
All of the following fees and charges are important factors to consider when estimating your calculate your closing costs in Florida. Note that not all of these fees will apply to every transaction, and that there may be others not included here.
Within three business days of your mortgage application, your lender must offer you with a loan estimate. The estimated final price of your closing is included in this document.
You can estimate your closing costs by using an online closing costs calculator that takes into account your geographic location, loan amount, and other relevant data.
Closing Disclosure
Before the closing, your lender will give you a closing disclosure, which is a breakdown of all the fees and charges you’ll incur. The loan estimate you received should be compared to this document to make sure there are no major inconsistencies.
In Florida, like in any other state, the buyer and seller each pay their own share of the closing fees. It is essential to your financial planning and the success of the transaction that you fully grasp what these fees entail and how to calculate them. Closing costs can add up quickly, so it’s important to get a loan estimate from your lender, use a closing costs calculator online, and read the closing disclosure thoroughly to make sure you’re prepared for everything.
