Let’s get right into it. So let’s say that you decided to purchase this home and we’re all excited about it. You’ve got the down payment that you need, or if you’re paying cash, you have the cash and you’re excited. But wait, wait, wait. There are closing costs that you are going to have to take care of in order to close on that property. So breaking down the closing costs, essentially, we’ve got to understand first, are you going to pay cash or you going to get a mortgage? If you’re one of the lucky few who’s going to pay cash, it is a great thing to buy in the state of Florida. If the seller is the one paying for the title insurance and you’re paying cash, your closing costs are next to nothing. Very, very tiny in comparison to the purchase price. For example, the buyer is responsible for paying to record the deed at the County.
To take that deed, the title company takes care of it to the clerk of courts costs a whopping $18.50 To record that standard pricing for your sheet to record that deed at the County level. The only other fees that you would have as a buyer is if you have a closing agent who is going to charge you fees to prep the documents, but a lot of times on cash, they actually don’t even charge you maybe a few hundred bucks at the most. Then if there’s any transfer fees with an association or anything like that, but cash deals are the way to go if you’re going to buy in Florida. Let’s say that you’re like the majority of us and cash is not really an option.
Then we have to start looking at what are the closing costs related to the loan. And that’s where things get quite interesting. So loans have a lot of different closing costs. Some of them come from the bank. Some of them come from a taxes that are owed on that money, but we’re going to break down what those closing costs are for you right now. First on the lending side of things, let’s talk about what the actual mortgage companies charge. Typically, there’s going to be some type of an underwriting fee and a processing fee. Now I will tell you that these fees vary widely and they can go anywhere from zero to I’ve seen thousands of dollars is what the bank charges. So that’s why it’s very important to shop your loan. When you’re looking to buy a home, the next step on the lending side of things, we have a few other charges that we need to discuss.
So there’s always going to be an appraisal. The bank is going to need an appraisal, unless you’re one of the lucky ones can get an appraisal waiver, but generally speaking, that’s between 400 and we’ll call it $600 for the appraisal. Most of the time that happens outside of closing. So they’ll actually have you fill out a credit card authorization so that they can order that appraisal on the property. Most lenders also charge what’s called a credit report fee or credit reporting fee. And so that generally ranges from anywhere 30 to $50 and that’s for them to pull your credit, run your credit. Now, finally, you’re going to have some fee relating to the loan that’s called prepaid interest. And what that does is it takes the interest from the day of closing forward to the end of the month so that you don’t have to pay your mortgage until the following month.
So, as an example, if you closed on July 15th, you would make prepaid interest for July 15th through July 31st, and then your actual payment. You wouldn’t need to make a payment July, August. It would be September 1st. All right, now we’re going to break down the title fees. So we’re going to make an assumption that the seller is the one who is paying for title insurance on the sale. Making sure that you have the guarantee that there is no liens or anything that would affect your ownership in the property. So if the seller is paying for title on the buyer side of things, your title fees are relatively low. Now that being said, there is typically a closing cost, a settlement fee from the title company, because they’re working with your lender to prepare the docs. They’re going to be the ones who are meeting with you for the signing.
Brad Dohack | Gulf Pointe Properties – The Brad Dohack Team | 239-839-1168 | Brad.HomeSearchinSWFlorida.com