FLORIDA CLOSING COSTS

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Buyer closing costs in Florida will range from 1% to 2% of the sales price of the home that you purchase.  Whether or not you obtain a mortgage has a lot to do with it, as well as what you negotiate in your sales contract.

 

Courtesy of Wells Fargo Home Mortgage:

 

Closing costs are one of the least understood aspects of the home financing process

The term "closing costs" refers to the money paid by the borrower to close a mortgage loan. Closing costs vary among different lenders and mortgage products. Separate from the down payment, these fees usually fall into one of three basic categories: out-of-pocket expenses, prepaid items, and mortgage points.

 

Out-of-pocket expenses

Out-of-pocket expenses usually cover third-party services that are directly charged to the borrower, such as fees for appraisals, attorneys, credit reports, deed recording, or tax services. Which services the borrower must pay for varies depending on the jurisdiction and the lender. If you don't understand what a particular fee covers, or why you are required to pay it, ask your lender to explain.

 

Prepaid items

Prepaid expenses can vary based on the type of property and the time of the closing, but they generally include homeowner's insurance, mortgage insurance, and fees associated with establishing an escrow account. Escrow accounts are set up by lenders as a mechanism for paying property tax and insurance premiums. Instead of paying the entire premium every six or twelve months, the borrower pays a portion of the cost along with every monthly mortgage payment. This helps the borrower avoid the hassle of planning for the large payments, while reassuring the lender that tax and insurance payments are always up to date.

 

Depending on the date of your closing, a certain amount of interest may also be prepaid. Because mortgage interest is paid in arrears, the interest for the first full month of the mortgage is generally due at the beginning of the second full month. Since it won't be included in your first mortgage payment, the interest that accrues during the time between your closing and the beginning of the first full month of your mortgage must generally be prepaid. When you schedule your closing, keep in mind that you would prepay more interest if you closed on the 5th than if you closed on the 25th.

 

Mortgage points

Most mortgage programs give borrowers the ability to reduce the interest rate on their mortgage by paying a certain number of mortgage points at closing. One mortgage point is equal to 1 percent of the amount of the mortgage, and the more points you pay, the more you can lower your interest rate. If you expect to stay in your home for a number of years, lowering your monthly payments by paying points up front can be a great investment.

For more information on closing costs, or for answers to any of your mortgage questions, contact a Wells Fargo Home Mortgage consultant today.

 

Florida Closing Costs

 

Here is a comparison from Bankrate (www.bankrate.com) of Florida closing costs as compared to the US average:

 

Item	Florida	U.S. average
Origination fees
Loan amount	$180,000	$180,000
Points	0.479	0.485%
Points ($)	$862	$874
Administration fee	$200	$237
Application fee	$282	$284
Commitment fee	--	$425
Document preparation	$265	$206
Funding fee	$188	$181
Mortgage broker, origination or lender fees	$928	$853
Processing	$361	$369
Tax service	$69	$69
Underwriting	$351	$303
Wire transfer	$25	$24
Title and closing fees
Appraisal	$310	$327
Attorney, closing or settlement fee	$314	$426
Credit report	$20	$20
Flood certification	$14	$14
Pest, other inspection	$60	$62
Postage / courier	$46	$45
Survey	$281	$234
Title insurance	$1,107	$756
Title work: Title search, plat drawing, name search, endorsements	$187	$167
Total average fees	$3,196	$2,748
NOTE: Not every lender charges for every item. The averages shown are for those that do charge for the item. This chart omits taxes and government fees such as documentary stamps, which can vary between cities and counties. It also omits escrow and prepaid items, which will vary by what day in the month and what month in the year you have your closing.
Source: Bankrate.com research by Karen Christie and Judy Dunn

 

Closing your purchase

The closing is the final phase of your home buying and mortgage process, so now your new home is just a few steps away. If you haven't already, make sure you do the following:

• Review your loan commitment with your lender to make sure you understand all the requirements.
• Set the closing time and date based on your sales contract and the loan commitment expiration.
• Confirm that a survey of your property has been ordered. Check with your closing agent or attorney.
• Make preparations to move (notify your landlord, complete change of address forms, arrange for utilities to be disconnected at your current address and made available at your new home, and plan your actual move).
• Conduct a final walk-through inspection of your home-to-be.
• Make sure you've satisfied all the requirements of your agreement with the seller.
• Get a certified or cashiers check from the bank for your closing costs. Cash or personal checks are generally not accepted.

On closing day, ownership of the property will be transferred from the seller to you, and you will sign documents that acknowledge your rights to the property you have purchased, your agreement to repay the money you have borrowed, and the lender's right to the property if you default on the loan. A closing agent (an attorney of your choice or a title agency representative, depending on local custom) will coordinate and distribute all the paperwork and funds, according to the terms agreed upon by you and the seller.

 

Florida closings are typically facilitated by Title Companies. That is the local custom.  You are certainly free to hire your own attorney, however.

 

On-Time Closings – Guaranteed

 

Nothing frustrates homebuyers more than delays in the closing schedule. That’s why we offer you our exclusive Wells FargoClosing Guarantee SM . We will close your loan on or before the closing date stated in your original purchase contract or we’ll write you a check equal to your first month’s principal-and-interest payment¹ .

 

The Wells Fargo Closing Guarantee reflects our commitment to excellence and to you. As the nation’s leading residential mortgage lender², we have on-time closing down to a science. On the rare occasion when our timing is off, we’ll make up for small delays in a big way.

 

Our money-backed Wells Fargo Closing Guarantee means you can feel confident about finalizing your home purchase. It’s just one more reason to feel comfortable about choosing Wells Fargo Home Mortgage.

 

As soon as you've taken care of the paperwork, you're a homeowner! Grab the house keys and get ready to start life in your new home.

 

¹ Available on all qualified purchase transactions. Other terms and conditions apply. See a home mortgage consultant for details.

 

² Based on 2008 year-end statistics by Inside Mortgage Finance, 1/30/2009.