Closing costs are the fees and prepaid items you pay at the closing table in addition to your down payment. In Florida they typically run 2 to 5 percent of the purchase price, which is thousands of dollars that should never come as a surprise.
Wiz's tip
Ask your lender for a fee worksheet at the very first conversation, not at closing. Comparing lenders side by side on fees is where first-time buyers save real money.
The steps, in order
01
Lender fees
Loan origination, underwriting, and processing fees charged by your lender for creating the loan.
02
Third-party fees
Appraisal, credit report, title search, title insurance, and settlement fees from providers your lender requires.
03
Prepaid items
Property taxes prorated to closing, homeowners insurance for the first year, and prepaid interest to the end of the month.
04
Florida-specific costs
Documentary stamp tax on the note and intangible tax on the mortgage, which add a few thousand dollars on larger loans.
How much should you budget?
On a $400,000 home, 2 to 5 percent in closing costs means roughly $8,000 to $20,000 on top of your down payment. Financed purchases typically land at the higher end because lender fees scale with the loan. Your lender must provide a Loan Estimate within three business days of your application, so you will see the exact numbers long before closing.
Can the seller pay them?
Sometimes. In many Florida markets, a seller credit toward the buyer's closing costs can be negotiated as part of the offer, up to the limits the lender allows. Whether that makes sense depends on the market and the seller's position. Michael negotiates with your interests as the only consideration.