One of the important things to keep in mind when closing a real estate transaction is the closing cost. Closing costs are the charges to be paid by the seller and buyer when closing the purchase of a home, to compensate the service providers. Closing costs are calculated based on all the expenses of a homebuyer, such as lender fees, escrow and prepaid amounts, and the cost of settlement services. The seller’s closing costs include a commission to the real estate agent and the ownership transfer fees. The buyer covers homeowner’s insurance, property taxes, mortgage insurance, and appraisal fees as part of closing costs. You should know that these costs are not included in the listed purchase price of the property and are calculated individually. Home buying closing costs calculator helps you estimate the total closing and hidden costs to be paid at the end of your home purchase.
Closing Cost Calculator Florida Buyer
Whether you’re moving to a different county or buying a new house in the same town, you’ll need the services of a lawyer, home inspector, lender, insurance provider, and appraiser. The costs for these services, known as closing costs, are about 2 to 5% of the purchase price of your home and are paid all together alongside your down payment. The majority of sellers prefer to work with an agent or take advantage of flat fee MLS in Florida. Closing costs witness significant variations depending upon the complexity of sale and price of your home. As per a recent report by ClosingCorp, the average closing costs for a home priced $255,006 in Florida stand at $4,606. It amounts to 1.81% of the home’s price tag.
Based on ClosingCorp’s report, the closing costs in New York, Washington, Columbia, New Jersey, Pennsylvania, and The Sunshine State are most expensive. Furthermore, while homebuyers in D.C. pay approximately $13,722 or 2.41% of their home’s purchase cost (national average – $6,087), homebuyers in Florida can expect closing costs somewhere between $7,020 and $10,456 owing to an average home sales price of $522,825.
How to Calculate Closing Costs?
Before you make a decision to buy your new home, it’s essential to include the estimated closing costs to your total home purchase price. This will save you from confusion and unexpected expenses at the eleventh hour. The closing cost calculator for buyer and seller in Florida helps you estimate closing costs based on a specific set of rules outlined by the state. As per the rules, listed below are the different expenses and fees that make up your final closing cost:
· Attorney Fees – Attorney fee refers to the cost of hiring a real estate attorney, and this fee depends on various factors such as the property location, level of complication of home sale and the number of hours of work the attorney needs to put in. Hiring an attorney is made mandatory in Florida, and other states including South Carolina, Alabama, Massachusetts, and New York to help protect the interests of homebuyers during the purchase process.
· Florida Title Search – The buyer also takes into consideration the charges of Florida Title Search. This is a crucial step when purchasing a home. Your title company performs an in-depth search on the home you’re buying and verifies whether the seller possesses the right to transfer ownership to you. It also verifies and ensures that the property is free from any unpaid taxes, pending lawsuits, ownership disputes, or judgements. The charges for title search can range from $150 to $1,500 owing to the complexity of the job.
· Loan Origination Fees – This refers to the fee charged by the bank upon creation of a loan. This may include charges for funding the loan, underwriting, processing of application, and various other administrative services.
· Escrow Fees – Title companies and real estate attorneys in Florida usually set up a neutral third-party ‘escrow account’ to hold onto your funds and keep them safe throughout the home buying process. These funds are released for payments only when the seller and other hired vendors have met all the necessary conditions pertaining to home sale. Escrow fee is the fee to be paid for this service.
· Property Taxes – Property taxes refer to the fees paid by the buyer to the county, state and other local authorities to help with the maintenance of roads, water/sewage upkeep, school funding, fire protection services, and more.
· Credit Report Fee – This is the fee charged by the lender to obtain your credit score and report to ensure that you’re a responsible borrower.
· Florida Title Insurance – Getting title insurance is another important step in the home buying process because it protects you in case there are other claims on your land or something was missed out in the initial title search. Unlike other insurance policies, title insurance fee is paid at the time of closing the deal.
· Home Inspection and Appraisal – This refers to the fee charged by the home inspector and appraiser for evaluating the condition of the home you’re buying and its components, and confirming the property’s fair market value.
· Surveying Fee – Closing costs in Florida are calculated based on various expenses including the surveying fee. With land survey being mandatory in Texas and Florida, the charges of hiring a surveyor also add to the closing costs.
· Private Mortgage Insurance – First-time home buyers are generally required to buy Private Mortgage Insurance (PMI) if they fail to provide a down payment of 20%. PMI lets borrowers avail conventional loans, irrespective of whether they’ve provided a 5% down payment or 19.99%.
· Florida Real Estate Transfer Tax – This tax is mandatory to be included in the closing costs. Real estate transfer taxes encompass state and local government taxes paid by the buyer/seller at the time of transfer of property.
· Homeowner’s Insurance – In addition to other payments, the lender requires you to pay your homeowner’s insurance for the upcoming year.