What Homebuyers Need to Know About Closing Costs

What Homebuyers Need to Know About Closing Costs

If you’re a fan of the many home buying and selling programs on TV, you have probably noticed that many homebuyers ask sellers to pay for something called “closing costs.” These are fees that are charged not only by the mortgage lender but also by other third parties that have been involved in the purchase of the home.

What’s Included in Closing Costs

Typically, closing costs average approximately 2.5% to 4% of the sales price of the home. The most common items included in closing costs that buyers are responsible for paying are:

• Title search and insurance fees
• Mortgage application fees
• State or local transfer taxes
• Homeowners association dues
• Appraisal fees
• Mortgage insurance premium
• Homeowners insurance premium
• Attorney’s fees
• Pro-rated property taxes

Sellers are generally responsible for paying real estate commissions, both for the buyer’s and the seller’s agents. However, there are some situations where a buyer could be responsible for paying a real estate commission, such as in a For-Sale-by-Owner transaction.

About the Closing Disclosure

Beginning October 3, 2015, lenders will be required by law to provide you not only with a Loan Estimate form, but also with a Closing Disclosure that must be given to you at least three days prior to closing.

The Closing Disclosure includes information on the loan terms, projected payments, closing costs, loan costs, a calculation of cash to close, a detailed line-item summary of the loan transaction and additional information, including disclosures on:

• Assumption
• Demand feature
• Late payment penalties
• Negative amortization
• Partial payment terms
• Escrow account

To help keep closing costs down, you can negotiate with the seller to cover some or even all of your closing costs. You may also have the opportunity to roll the closing costs into your mortgage loan by paying a higher price for the home.

The attorneys at Jurado & Farshchian, P.L. combine their knowledge and experience in Florida real estate law to represent both buyers and sellers of Florida real estate. Contact one of our experienced Florida real estate attorneys at (305) 921-0440, or email us at info@jflawfirm.com.

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