What do "Closing Costs" Entail?

Closing costs are sometimes misunderstood and therefore, can often create a certain element of surprise. Perhaps the information which follows will help you to anticipate some of the most common elements. Please note that these are stated as approximations since factors may vary according to specifics of the real estate transaction, state and county ramifications, etc.

Estimated Closing Costs....... Buyer

  • Lender Charges for a New Loan: Discount Points/Origination Fee - A point is equal to 1% of the loan amount (ex. $1000 on a $100,000 loan). Points vary depending on the interest rate desired and the chosen loan program.  At Chase Diversified Mortgage there are programs available with or without points, depending on the client's requirements.
  • Real Estate Appraisal:  Our charge is $275, payable at application initiation time.
  • Pre-paid Interest: Interest is charged from the date of closing to the end of the month in which the closing occurs.
  • Tax Escrow: taxes are pro-rated from November 1st to the day of closing, and are a credit to the buyer.  Lenders usually require a tax escrow reserves account to ensure adequate funds are available when due the next November.  Some lenders provide a waiver for tax escrow at a nominal fee.
  • Private Mortgage Insurance: PMI is required when your down payment is less than 20% of the purchase price and is paid monthly as part of the mortgage payment. The amount varies depending on the actual percent of loan to value and is maintained in an escrow account.
  • Homeowners Insurance: The buyer is responsible for providing the lender with proof of hazard insurance. Mortgage loans will not be funded until an insurance policy has been provided to the lender. The lender may also require flood insurance.  Lenders usually maintain an escrow account for these reserves.
  • Recording Fees: $6.00 for the first page and $4.50 for each page thereafter for most counties in the State of Florida.  Normal charge is $90.
  • State Stamps: State Documentary Stamps affixed to the note are $3.50/$1,000 and Intangible Tax affixed to the Mortgage is $2.00/$1,000, both are based on the amount of the mortgage and are the responsibility of the buyer.
  • Owners Title Insurance: The minimum charge is $5.75/$1,000 for the first $1000,000 and $5.00/1,000 thereafter up to $1,000,000, based on the sales price. This is paid by either the buyer or seller depending on county specifications.
  • Lenders Title Insurance: When issued simultaneously with an owners Title Policy the cost can range from $25.00 - $250.00, depending on which county the property is located.
  • Closing/Title Search Fees: Title companies customarily charge a closing/escrow fee which can reange from $75 -$150 and a title search fee which ranges from $125 to $150, depending on where the property is located.
  • Other Possible Charges: courier fees, survey charges, inspections and additional lender charges my apply and can total around $500......these may vary from lender to lender.
In the following chart we illustrate typical closing charges associated with the actual processing of a loan in the amount of $150,000 for a property located in Palm Beach County, Florida.  Please note that certain factors are constant while others are based on the specific loan amount. Thus, total  processing costs will vary depending on the loan amount.  In addition to the actual processing charges (referred to here as "closing costs") there will be other charges due at settlement which relate to the above-mentioned pre-paid interest and applicable tax and insurance escrows.  For purposes of this illustration, we address only the indicated "loan processing" charges in the following chart.

Typical Closing Costs on a $150,000 Mortgage
Appraisal Fee   300
Document Prep 200
Underwriting Fee 200
Title  Insurance 800 **
Recording Fees 100
Doc Stamps 525  **
Intangible Tax 300  **
Flood Check 25
Tax Service 72
Courier Fees 50
Total Costs 2572

Note:  "**" = factors dependant on loan amount

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