Closing Costs for Buyers | Fort Lauderdale
Closing Costs? What are they? How much will mine be? A common question for buyers of Fort Lauderdale real estate. The sellers side is fairly simple, not too many costs but the buyers side can have many, especially if you’re financing your new home.
Here’s the definition of closing costs: Fees for final property transfer not included in the price of the property. Typical closing costs include charges for the mortgage loan such as origination fees, discount points, appraisal fee, survey, title insurance, legal fees, real estate professional fees, prepayment of taxes and insurance, and real estate transfer taxes. A common estimate of a Buyer’s closing costs is 2 to 4 percent of the purchase price of the home. A common estimate for Seller’s closing costs is 3 to 9 percent.
You’ll be responsible for a variety of fees and expenses that you and the seller will have to pay at the time of closing. Your lender must provide a good-faith estimate (GFE) of all settlement costs. The title company or other entity conducting the closing will tell you the required amount due at closing. Most title companies are now requiring the funds required for closing be sent via wire transfer.
Your Realtor® should review the fees on the settlement statement to ensure everything is correct.
- Down payment & deposit
- Loan origination fee
- Points, or loan discount fees, which you pay to receive a lower interest rate
- Home inspection
- Credit report
- Private mortgage insurance premium
- Insurance escrow for homeowner’s insurance, if being paid as part of the mortgage
- Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for you.
- Deed recording
- Title insurance policy premiums
- Notary fees
- FedEx/Courier fees
- Prorations for your share of costs, such as utility bills and property taxes
A Note About Prorations: Many bills are paid on either a monthly or yearly basis, so you most likely will have to pay a bill for services used by the sellers before they moved. Proration is a way for the sellers to pay you back or for you to pay them for bills they may have paid in advance. The biggest proration is for property taxes. Property taxes in Broward County are paid in arrears, meaning that you pay for the previous year when you pay in November. So assume you buy the home on the 6th of September. The seller would owe from January 1st until September 5th. Your closing statement will show a proration charging the seller for the time they owned the house so that you have the money to pay the bill when it’s due in November.
For more information on your property taxes in Fort Lauderdale and Broward County, click here.