Avoid Closing Cost Surprises!

Even if you've purchased several homes in the past, there always seem to be costs at the closing table that you weren't prepared for.  While mortgage brokers are now required to disclose all of their closing costs, there are other costs not associated with a mortgage you will need to be aware of.  This is especially true if this is your first home.

1. Appraisal Fee- While appraisals tend to be very subjective, they are still required by all lenders.  The appraiser will compare the home you're interested in buying to other homes with similar features in the same neighborhood or area that have recently sold.  They like to use data from the last 3 months but will go up to 6 months out if necessary.  Costs range from $175-$500 depending on the size of the home.
2. Property Taxes- Property Taxes in FL are paid in arrears and pro-rated at closing.  Since most lenders include your taxes in your monthly payment, if you're getting a loan, your lender will usually receive your tax bill each year and adjust your monthly payment accordingly.
3. Survey Fee- The FL Realtors sales contract stipulates that the seller must provide the buyer with a copy of the survey if they have one.  If not, the buyer has the option of having one done by a certain date.  You should always have a survey done so you know exactly what you're buying.  Surveys run between $700-$1500 depending on the size of the property.
4. Property Insurance- Your lender will require homeowner's insurance on the property and will typically roll it into your monthly payment.  If you're paying cash, make sure you shop around for the best rates.  Homeowner's insurance should cover the structure and the contents.  Keep in mind that if you're purchasing a condo, the HOA fees should include homeowner's insurance for the exterior of the structure.  The contents will be your responsibility to insure.
5. Service Charges- You will need to have utilities hooked up or transferred into your name including power, water, cable and internet.  If you're new to the area, some of these may require additional "hook-up" fees. 
6. Legal Fees- You should always have an attorney or title company handle the closing.  This insures that nothing has been forgotten.  Your Realtor can help you select a good one.
7. Mortgage Loan Insurance Fee- This fee is also called PMI and is usually required by lenders on loans with little or no money down.  This typically costs between 0.5%-3.5% of the total amount of the mortgage.  Check with your lender for more information.
8. Mortgage Brokers Fee- Mortgage brokers typically charge a fee for their services but sometimes the lender will absorb their cost.  The advantages of using a mortgage broker over a bank can include a larger variety of programs to choose from with requirements that are not always as strict as a banks.  Banks don't typically charge an origination fee but they can be limited in their options.  Your Realtor can give you a list of banks and mortgage brokers to shop around.
9. Moving Costs- Moving costs always seem to be more than at first anticipated.  Always get several different quotes and make sure you book far enough in advance.  This is especially true in season.
10.  Maintenance Fees- Don't forget about your HOA fees if you're purchasing a condo or a home in a gated community.  Sometimes there is also a one time "assessment" due at closing.  Make sure you ask your Realtor about all fees that will be associated with the condominium complex or neighborhood you're going to be living in.
11. Title Insurance- If you're obtaining a mortgage, the lender will purchase their own title insurance to protect their interests; you need to make sure your interests are protected as well.  This is especially true if you're purchasing a foreclosure.  Rates are typically around $350.  If you're buying a home in Collier County, the seller is required to either transfer their current policy to you or credit you $350 at closing for a new policy.  Check with your Realtor or the title company for more details.
12. Local Improvements- You may owe fees associated with new sewer lines or other improvements that the city or county has implemented.  These should have been disclosed to you before the contract was signed but always double check with your Realtor just in case.

This should cover most closings but there might be one or two things that are not listed here that might be property specific.  Make sure you use a competent Realtor that will insure your best interests are served and that there are no surprises at the closing table.  Feel free to contact The Boyle Team anytime for questions about closing costs or anything else real estate related!