What is included in closing costs when you buy a house in Florida? A blog article by Discom Realty. So you are thinking about buying a home here in Florida – congratulations on making a wise decision!

Discom Realty has tons of experience working with first-time home buyers, busy professionals, and retirees too. If you are like most of our past clients,  you’re probably focused on saving as much as you can for the down payment.

As you are thinking about ways to increase the down payment amount keep in mind that you will need to cover closing costs. So what are closing costs and why are they part of the home purchase? This blog article was written to address these questions about closing costs and a few other ones too. Also, feel free to follow us on Facebook.

What are closing costs?

Simply, closing costs include several fees, including those associated with originating, processing, and underwriting your loan, recording the transaction with your county, appraising your home, and more. Taxes and insurance are also part of these expenses.

So you need to stop and take a moment to consider how to best set up a realistic homebuying plan. If you need help our team of experienced and dedicated realtors can assist to make sure you factor in this additional upfront expense so that you can set yourself up for success.

Are you eyeing a home purchase in the near future? Here are few more things you should about closing costs.

When do you pay the closing costs?

Closing costs are paid on closing day, once your loan is ready to be finalized. You will also be requested to bring in a check to pay your down payment at this time.

How much are closing costs?

The exact amount you’ll pay will depend on various factors, including your location, loan amount, lender, and other factors. But don’t worry our Discom Real Estate Team will help you understand what is included prior to and on the closing day.

We understand that there is a lot of information flowing your way, so we will take time to go over everything with you in detail more than once if necessary. But, as a rule of thumb, you can generally expect to pay somewhere between 2% and 5% of your total mortgage balance.

How do you calculate closing costs on a house?

Many first-time buyers underestimate the amount they will need when buying their first property. But, don’t worry our team of experienced and professional real estate agents can help you make certain that does not happen.

Generally speaking, a home buyer will want to budget between 3% and 4% of the purchase price of a resale home to cover closing costs. So, on a home that costs $200,000, your closing costs could run anywhere from $6,000 to $8,000.

Do closing costs include realtor fees?

Yes, typically closing costs for the seller will include realtor fees. Further, at the closing table are the time determined to square away the closing costs and realtor fees. These fees are due at the same time. Closing costs, therefore include the realtor’s commission are due at closing, but typically they’ll be paid by both the seller and the buyer.

Are closing costs considered to be tax-deductible?

Unfortunately in most cases, the answer is “no.” The only mortgage closing costs you can claim on your tax return for the tax year in which you buy a home are any points you pay to reduce your interest rate and the real estate taxes you might pay upfront.

Are there ways to reduce closing costs?

Yes, of course, there are ways you can possibly reduce some of your closing costs. You can reduce your closing costs by shopping around for your lender and title company, asking the seller to contribute, or, in some cases, negotiating with your lender.

Please be aware that a seller can refuse to pay the buyer’s closing costs. Often, we see that buyers negotiate to have the home’s seller(s) cover their closing costs when they submit an offer. They do this to reduce the amount of cash they have to bring to the closing table on the closing day.

Is borrowing money to pay for the closing costs allowed?

Some closing costs can be rolled into the home mortgage loan. Whatever money you have saved up can pay for closing costs or any cash-to-close funds. Be sure to document where the money is from so your lender knows you can pay your mortgage payment.

The upside of writing a check for your closing costs when you finalize your mortgage is that you don’t have to take on more debt when you buy a home. If you roll your closing costs into your loan, you pay interest on them. Pay them upfront, and you don’t, which keeps your monthly payment lower.

Many lenders offer what’s called a “no closing cost” or “zero closing cost” mortgage. With these mortgages, you don’t have to pay cash at closing for any of the fees and charges you’d normally pay. The closing costs will be rolled into the mortgage itself, increasing the total balance.

Selling a house comes with closing costs, so make sure you’re prepared if you’ll need to sell a property before buying your new one.

Ready to start your home search? Get in touch with Discom Realty today.

Thanks for reading this blog article that discussed closing costs and what they are. We hope it helped you get some real estate questions answered. Selling or buying a home is probably one of the biggest life decisions you will ever make. Discom Realty understands this and ready to help you every step of the way. Call us today at 407-739-2833