Here are six important closing costs that buyers need to know about in Florida.
Here are six of the most important closings costs buyers need to remember when undergoing a home purchase in the state of Florida:
1. Deed documentation stamps and title insurance. These are two of your largest closing costs on a home purchase. Everything is negotiable, but typically, the seller is paying for doc stamps on the deed, and we suggest that the buyer elects to pay for title insurance and any related title fees. The title company will make sure that you have free and clear title without any liens or encumbrances tied to your property prior to the closing.
2. Lending fees. When speaking with your lender, remember to ask about the fees associated with the loan, which depend on the loan amount. You’ll also be required to pay state taxes in addition to the doc stamps on the note. You can compute this by dividing your loan amount by 100 and multiplying it by 35 cents. Intangible taxes can be calculated by multiplying your loan amount by .002. It’s important to know how much these fees will be up front so that you can go into the closing a bit smoother.
3. Home inspection. We always recommend that buyers get a home inspection, which can range anywhere from $300 to $700 or more depending on the type of property and the square footage. There are many more things to research with a home as compared to, say, a condo, since a home has an exterior element.
4. Appraisal and survey fees. Lenders will require these as part of your loan process, but we suggest it for cash buyers as well. It’s important to know the dimensions of your lot and to have it staked out. If the seller doesn’t have an updated survey, we suggest that you always get one. Appraisals are also determined by the type of property you’re getting; we highly suggest that you get one of these too since they give you a professional’s opinion of the property’s value.
5. Processing fees. These aren’t the most expensive fees in the closing process, but it does take time to print the documents, process them, pay the mail and notary fees, and pay all the other fees associated with the closing that will be added to your file.
6. Prepaid taxes and insurance. Many lenders will require you to pay the year in advance before closing to minimize the risk for the loan—this can be a fairly large fee. Mind you, there will be prorations from the seller, as well, based on the closing date, but you need to be prepared for it.
These closing fees can range anywhere from $2,500 to $20,000 depending on the purchase price and the loan amount, but regardless, you need to prepare for more than just the down payment so that you can come into the closing with all the details you need.
We’d be happy to help you with this process if you’re in the market to buy a home. Just reach out to us with any questions you have, and let us know how we can help you.