Florida Closing Costs 2022. How much will you pay?

Table of Content

What are closing costs?

How much should the closing costs be in Florida?

How much should I expect to pay in closing costs as a buyer?

How do I calculate closing costs?

Who pays the closing cost in Florida?

How much are closing costs?

Do closing costs include a down payment?

What is included in the closing costs?

When do you pay the closing costs and down payment?

What are closing costs?

Most people who are now entering the housing market are aware of the need for a mortgage and a down payment, but what they tend to forget is that there are closing costs involved. These fees are normally paid by both parties in the transaction. That means that both the seller and the buyer will need to be prepared to pay the closing costs for the house that they are buying. These real estate fees may vary from home to home, as sometimes they can be related to a specific house, and they are meant to cover the loan origination fees, appraisal fees, title search, title insurance, credit report charges, taxes as well as a number of other fees that are necessary for the completion of the transaction. 

How much should the closing costs be in Florida?

The home closing costs in Florida may vary from home to home as different fees and costs may be associated with each house. For example, if you are buying a house and you are getting a mortgage for that purchase, part of those closing costs will relate to that mortgage. You will also be called to pay recording fees, and a part of the insurance and tax fees for the next year upfront. All of these put together usually amount to 2-5% of the purchase price, which is a fairly standard amount for closing costs. According to some sources, there are also occasions in which the closing costs for a property could be as high as the deposit payment was, but that can be viewed as atypical. Of course, depending on your situation in purchasing a house and the house that you are buying those closing costs could vary and could be much lower or higher than what is stated above. 

How much should I expect to pay in closing costs as a buyer?

Closing costs for buyers can be quite high depending on their area, the house that they are purchasing, and whether they are going to be using a mortgage for the purchase of the house. In situations where a mortgage is going to be used for the purchase of the house, the buyer should expect that as part of the housing closing costs, they will be called to pay the following fees relating to the mortgage: 

1. Underwriting fee

2. Processing fee

3. Lender specific fees: these are fees determined by the lender that is giving you your mortgage and will vary from lender to lender

4. Recording fees for your mortgage 

Apart from all the mortgage-related fees that you will need to cover as part of the house closing costs, you will also need to prepay a portion of the taxes for the property as well as a part of the insurance costs. All of these make up the closing costs for the buyer, which are not usually the responsibility of the seller. Although, at times the seller may be called to pay part of the property taxes depending on the situation. The closing costs for the seller differ from the ones listed above as they do not relate to the mortgage, but rather have to do with a number of other fees. 

How do I calculate closing costs?

Calculating closing costs is not always easy, depending on whether you are the buyer or the seller you will be called to estimate different fees for closing. As the buyer in order to estimate the closing costs, you should contact your lender and see what closing costs are associated with your mortgage. Normally, the closing costs relating to your mortgage will be around $2,000 but they can be higher than that depending on your lender and your mortgage. You will also need to estimate what about 1/12 of your insurance and taxes will be and be prepared to pay that or more as part of your closing fees. If you are the buyer the closing costs for the company are fairly simple to figure out and you are much more likely to estimate them properly. 

If you are trying to estimate the closing costs for the seller you will need to consider a number of different fees, payments, and taxes that will be your responsibility to cover. Depending on the house you are purchasing and the area that it is in you may find that the cost of these closing costs may be higher or lower than originally expected. The following fees are usually the fees that the seller will need to pay for the house closing costs: 

• Agent commission
• Title insurance
• Transfer tax
• Escrowed money for the buyer
• Prorated property taxes
• HOA fees: these have the highest variability depending on your area 
• Credits toward closing costs
• Attorney fee 

Who pays the closing cost in Florida?

Both the seller and the buyer will need to pay parts of the closing costs in Florida. Each one of the two parties in the transaction is made to pay different parts of the closing costs and depending on the area that they are in and the house. 

The seller of the house should be prepared to cover the following house closing costs: 

1. Agent commission
2. Title insurance
3. Transfer tax
4. Escrowed money
5. Prorated property taxes
6. Homeowner’s Association fees (HOA)

The buyer of the house should be prepared to cover the following house closing costs: 

1. Underwriting fee

2. Processing fee

3. Lender specific fees

4. Part of the House Insurance

5. Part of the House taxes to the county

6. Recording fees for your mortgage 

How much are closing costs?

The amount that you are going to be called to pay as part of the house closing costs will entirely depend on the house, the area that the house is in as well as the lender that you have selected for your mortgage. All of these will factor in and affect the total closing costs for the house. Normally in Florida, the closing costs for the house will range between 2-5% of the total purchasing price of the home, but depending on the factors stated above you may find that they are on the lower or higher end of that spectrum. Occasionally the closing costs may be higher than that percentage, but the average is usually below 5%. 

Do closing costs include a down payment?

While both your Down payment and your closing costs are things that you will need to budget and prepare for if you are looking to purchase a house, you should distinguish between the two in your mind. This is because the closing costs and the down payments are two completely different parts of purchasing a home. The predominant difference between the two is that your down payment is part of the house payment. This means that whatever you pay as part of your deposit will then be deducted from the total house purchase price that you will need to cover. By contrast, as covered above, the closing costs are a set of taxes, costs, and fees that both the seller and the buyer will be called to make so as to be able to legally proceed with the transaction. While both the house closing costs and the down payment are essential for the purchase of a house, their function in the entire process is completely different and as such people who are looking to buy a home should be careful to budget for both the down payment and the closing costs of the house ahead of time. 

What is included in the closing costs?

A number of different taxes and fees are a part of the closing costs and depending on whether you are the buyer or the seller you may find that you are required to pay off different things in order to be able to complete the transaction and purchase the house successfully. The list provided below is an extensive list of the fees and taxes that both parties will need to cover, but depending on your area you may find that there are extra fees that you are called to pay as part of the purchasing process. 

• Agent commission and Attorney Fee: In order to be able to proceed with the transaction you will need to pay both the agent commission and the attorney fees, in cases where an attorney was used, as part of the closing costs. 

• Title insurance: This is a form of insurance that is purchased as a means of protecting homebuyers from costs caused by defects in the property title

• Transfer tax: Tax paid for transferring a property from the old owner to the new one

• Escrowed money for the buyer: This is the money that has been put aside and is held by a third party for the buyer

• Prorated property taxes: These are parts of the property tax that are to be paid by both the seller and the buyer usually.

• HOA fees: Homeowners Association Fee, these will vary based on the area that you are in

• Mortgage-related fees: Underwriting fee, processing fee, recording fees, Lender specific fees, all of these fees are set and decided by the lender

• Part of the House Insurance: The buyer will also need to pay a part of the house insurance for the following year. Usually, that is 1/12 of the cost of the total annual cost of the home insurance. 

When do you pay closing costs and down payment?

If you are purchasing a house, you will find that you are called to cover a few different costs for that purchase to be completed. Normally those costs are known as the closing costs and the down payment. While these two cover different aspects of the purchase they are both equally important. The down payment is meant to be a large part of the house payment that you will pay to purchase the property and the closing costs cover an assortment of different fees and taxes that are necessary for the transaction to be completed. As both of these are essential for the completion of the transaction and for the property to change hands from one owner to the rest, they are usually both paid during the closing of the property. This means that after you have completed all the negotiations and you are ready to sign the documents for the house, you should be prepared to pay both of these on the spot, as they are necessary for closing the deal and allowing the ownership of the property to be transferred. 

Summary:

The closing costs are a big part of preparing to purchase or sell a home, and while many homebuyers ignore it or are unaware of the costs associated with closing it is much better to be prepared as the closing costs for a home can oftentimes be large. This is because the closing costs will cover everything, from fees to the mortgage lender, to property taxes and transfer taxes, to part of your insurance company, and the fees for the agent and attorney used. All of these different fees and taxes put together normally bring the price of the closing costs at around 2-5% and therefore when considering entering the real estate market as either a buyer or a seller you should be prepared for the fact that you will need to spend a few thousand dollars on the closing costs for the property that you are in the market to either buy or sell.