LendingwithNelly

27 Jan, 2025

Closing costs are an unavoidable part of buying a home, but they can catch buyers off guard if not planned for. Here’s what you need to know about these expenses and how to minimize them.


What Are Closing Costs?


Closing costs cover the fees and services required to finalize your home purchase. In Florida, these costs generally range from 2% to 5% of the home’s purchase price.


Common Closing Costs


1. Loan-Related Costs


a. Origination Fees: Charged by lenders to process your loan.
b. Application Fees: Covers the cost of evaluating your loan application.
c. Discount Points: Optional fees to lower your interest rate.


2. Title and Legal Fees


a. Title insurance protects against claims on the property.
b. Title search ensures there are no legal disputes over ownership.


3. Taxes and Prepaids


a. Property taxes (prorated for the year).
b. Prepaid interest on your loan.
c. Upfront homeowners insurance premiums.


4. Inspection and Appraisal Fees


a. Home inspections identify structural or safety issues.
b. Appraisals confirm the property’s value.


Tips to Reduce Closing Costs


• Negotiate Seller Contributions: In a buyer’s market, sellers may agree to cover a portion of closing costs.
• Compare Lenders: Different lenders may have varying fees.
• No-Closing-Cost Mortgage Options: Some lenders offer this option, but it usually comes with a higher interest rate.
By understanding and planning for closing costs, you can avoid surprises and stay on budget during your home purchase.
Need guidance with closing costs? Call LendingwithNelly at 305-776-8381 for personalized assistance.