Daniel W. Uhlfelder P.A. | Attorneys At Law


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Mortgage closing costs explained

On Behalf of | Apr 10, 2020 | Real Estate Law

Virtually every first-time homebuyer in Florida knows that a down payment is necessary to secure a home. When it comes to closing costs, many are surprised the first time they hear about it. Some of the immediate questions include what it is for, how much it costs and whether it can be rolled into the final loan.

Trulia estimates that closing costs can be as high as 5% or as low as 2% of the house’s total cost. These costs cover expenses like:

  • Documentation preparation fee
  • Homeowners insurance
  • Prepaid loan interest
  • Underwriting fee
  • Origination fee
  • Title insurance

NerdWallet collectively describes these as the expenses related to the services necessary for finalizing a mortgage. Homeowners pay these fees even when refinancing a home. Note that closing costs can also get rolled into the loan if necessary. Yet, one of the questions that not enough people ask is who is responsible for paying this amount.

Most buyers automatically assume they are responsible for the fee. This is not always the case. A seasoned agent can help to negotiate with the seller to have them pay partial or even the full closing costs. While possible, it is rare for sellers to pay a large portion or all of the closing costs because they are also responsible for paying the real estate agents’ commission.

It is also worth noting that some organizations have programs available to help buyers cover closing costs and down payments. These programs are often aimed at first-time homebuyers, minorities and even people recovering from natural disasters.

Buyers should do thorough research to see what Florida programs are available and identify which ones they might be eligible for. This helps to ensure they leave no “free money” on the table when securing their home. An experienced professional, such as a real estate attorney, can also help buyers protect themselves.