Many well-known people call Parkland, Florida home, as it is one of the wealthiest cities in Florida. Because of this, an increasing number of families and even younger couples are considering relocating to the area.
Taking into account all of the costs that are associated with buying a home requires a sizable financial investment on the part of the buyer. It is common practice for prospective home buyers to create a budget for their down payment, but those who have never purchased a house before may forget about closing costs.
However, it is important for first-time homebuyers to be aware of and budget for closing costs because these constitute a significant sum, often equal to or even greater than the down payment.
Fortunately, closing costs in FL are more affordable than those in other states. Read on to learn why this is and to learn more about the other essential things about FL Closing Costs.
Closing Costs in Parkland, FL
Closing fees on newly built homes are typically rolled into the purchase price by the builder, a practice that was common when the real estate market was more stable. However, as a result of the cutthroat competition that exists in today’s housing market, the majority of builders have withdrawn this offer.
As an alternative, closing costs in Florida new construction are typically offered in conjunction with a decrease in the overall price. Despite this, you should only expect to see them removed partially.
To help you understand further, here are some of the most common closing costs in FL that you can encounter in a typical housing deal.
The fee charged by the lender for the processing of your mortgage application. Inquire about the application process before you try to get a mortgage.
The cost of having an attorney draft and examine the paperwork involved in buying a home. Legal representation is optional during a real estate transaction in some states.
Depending on state legislation, the closing agent (title firm, escrow business, or attorney) is compensated for their services with this fee, also known as an escrow fee.
Closing Costs in FL include this fee which is used to speed up the delivery of signed documents.
A lender may charge you a fee to obtain your credit report from any of the three leading credit agencies — Experian, Equifax, and TransUnion. Some financial institutions may waive this cost because they are offered a rebate by credit bureaus.
When you close on a home purchase, specific lenders will require you to fund an escrow account with the equivalent of two months’ worth of payments for your mortgage insurance and property taxes.
This is the cost of hiring a qualified professional to check for flood damage. The purpose of the inspection is to establish whether or not the property is located in a high-risk flood area and needs insurance coverage. Inspecting the property at regular intervals to track any changes in its flood status is included in the cost.
Lenders typically require proof that the first year’s premium for homeowners insurance has been paid in full before closing.
This is the cost of hiring a trained professional to inspect your home for toxic lead-based paint.
Lenders are safeguarded against ownership disputes and liens not uncovered in the title search by paying a one-time upfront payment of the title insurance.
This fee, typically 1% of the loan amount, goes toward the lender’s overhead in approving and processing your mortgage. Some lenders use a higher interest rate in place of origination fees.
This coverage protects you in case someone contests your ownership of a residence. It is optional, but legal professionals strongly advise that home buyers purchase this because having no title insurance exposes you to significant risk in the event that a title defect is present.
This covers the price of a termite, dry rot, or other pest inspection performed by an expert. Inspections are necessary for some jurisdictions and some types of government-insured loans.
These are a one-time, up-front fee paid to the lender in exchange for a lower interest rate and monthly payment. Points are expressed as a percentage of the loan amount. Due to the current low-interest rate environment for mortgages, paying points may not yield significant savings.
Prepaid Daily Interest Charges are the sum of money you pay at closing to cover the interest on your mortgage from the closing date until the first payment is due.
You must pay this amount to a third-party property assessment firm to get an accurate estimate of your home’s valuation and loan-to-value (LTV) ratio.
If any local property taxes are outstanding, they must be paid at closing or within 60 days of the acquisition date.
This fee is charged by state and local agencies for registering a property’s transfer of ownership.
This is paid to the survey company that verifies and confirms your property lines before you close.
The fee charged by a title company for researching property documents held by the government. A title company will check these documents to ensure that the property is free and clear of any claims to ownership or liens.
Transfer tax refers to taxes paid when the title of a property is transferred to the new owner’s name.
Lenders will typically impose an underwriting fee to cover the costs associated with checking your finances, job, and credit before extending final loan approval.
What the Average Closing Costs Are for a Property in Parkland, FL
The percentage of the purchase price typically allocated to cover closing expenses in Florida is around 2.58%. This seemingly small cost might add up quickly if you purchase a high-priced house.
The typical sale price of a home in the state ranges from $300,000 to $400,000. If you buy a home in that price range, you need a budget between $7,740 and $10,320 for the closing fees and property taxes.
This sum takes into account the fees associated with the assessment, settlements, and record processes, as well as the title insurance and flood certification that is mandated by the state.
Tips or Advice You Can Give Regarding Closing Costs in Parkland, FL
Although you can only partially avoid closing costs, different approaches may be taken to reduce the typical closing expenses you need to pay. Here are some tips that may help you lower your total closing costs.
Depending on the fees charged by each lender, you could save a significant amount of money on closing charges by shopping around. You are not obligated to hire the lender-recommended title company, pest inspector, or homeowner’s insurance provider. It is prudent to shop around and compare costs.
Prepaid daily interest rates can be minimized by scheduling your closing during the latter part of the month. A financial institution can run this scenario to estimate your potential savings.
Depending on the circumstances, the seller could reduce the purchase price or pay for some or all of your closing costs. When there have been few offers on the house for a while and the seller is eager to close the deal, it is more likely for the total closing costs in Florida for the seller to include some or all the closing costs of the buyer as well.
The initial loan estimate you receive should be thoroughly examined. You should always ask your lender for clarification if you need help understanding what a fee involves or why you’re being charged a particular fee. A red flag should be raised if a lender is evasive or unwilling to explain a cost.
Please feel free to reach out to our team or call us directly at 800-544-7348 in case you have further inquiries about the closing costs in Parkland, FL. Are you interested in exploring the city? You can use this interactive map to help you navigate the city faster and easier. To receive the latest news and updates about the area, you can follow us through our social media accounts below:
Frequently Asked Questions
The average closing costs in FL are between 2.05% and 2.74% of the total purchase price before taxes.
Many buyers have successfully convinced the seller to assume responsibility for paying their closing costs. The term for this kind of arrangement is “seller concessions.” The money is often deducted from the total amount earned from the sale. Typical closing costs for seller in FL sometimes include seller concessions.
Are there any hidden fees or extra charges I should be aware of when closing a property in Parkland, FL?
Every home deal is different from one another. Thus, it is essential to set aside additional funds to cover all of the expenses that may arise before, during, or after purchasing a home.
The following is a list of five suggestions that will help you save money on closing expenses in Florida:
- Analyzing the loan estimate
- Bargaining with the lender regarding fees
- Obtaining a mortgage with “no closing costs”
- Choosing the appropriate title company
You can have a detailed explanation of each closing cost by browsing our featured blog or contacting us directly for further assistance.
When purchasing or selling real estate, it is impossible to avoid incurring closing expenses. However, there are ways to minimize the total average closing costs in FL for buyers. Using the FL closing cost calculator is also recommended to help you budget your finances efficiently and ensure that you have everything accounted for.
If a seller wants to cover all or part of the buyer's closing costs, what is the best way to do that?
Before a house purchase transaction is finalized, the buyer and the seller should take the time to identify and lay out their respective roles and responsibilities. It is also essential to do this to avoid confusion and clear up any ambiguities that may arise, in particular when discussing who pays closing costs in FL.