As we begin to look at homes for sale, we often judge them by the listing price (in comparison to the home’s condition and amenities). We see the price as the amount we have to pay and typically forget there are closing costs to be paid at the end of the transaction. Many home buyers don’t take into account how much these closing costs can be and forget to budget them into their savings. To help avoid this situation, here’s a breakdown of closing costs in Destin, FL:
What Are Closing Costs?
Essentially, closing costs are fees charged by both your mortgage lender and third-parties. These costs are charged for services that are necessary in order to legally finalize the sale on any Florida home. Typically, it is the buyer who is responsible for home closing costs and you must pay them in full at the time of closing. It is important for home buyers to take closing costs into consideration ahead of time, as these are paid in addition to a down payment, real estate agent fees, and other expenses related to buying the home.
What Charges Go Into Your Total Closing Costs?
There are many expenses that are covered in your closing costs. These expenses come from both your mortgage lender and third-party entities. Your mortgage lender, for example, charges closing costs related to paying your loan broker, processing the loan, underwriting of the mortgage, document preparation, and loan origination. On the other hand, third parties such as title companies and appraisers will charge other closing costs associated with performing a title search, conducting inspections on the property, appraising the value of the home, and closing on the sale.
How Much Will You Pay in Closing Costs?
The total amount that you will pay for your home closing costs in Destin, Florida will vary greatly depending on the terms of your loan and the total cost of your new home. In general, buyers can expect to pay between 2.5% and 5% of the cost of the home in closing costs. In the state of Florida, the average closing costs are around $4,500, with the majority of those being comprised of third-party and title fees. Florida’s average closing cost is a bit higher than the national average, which is about $3,700.
How Can Home Buyers Avoid Closing Costs?
While paying closing costs may seem like a pain, the good news is that these expenses can often be avoided with enough planning and negotiation. Home buyers who know from the start that they will not want to deal with the hassle of paying their closing costs out of pocket may want to consider a no-closing cost mortgage, which will build the closing costs into the loan itself. Sometimes, buyers can also negotiate with the sellers to get them to pay some or all of the closing costs.
Buying a Home in Destin, FL
Overall, closing costs are a necessary part of finalizing the sale on any home. Now that you know what to expect from your closing costs, you can begin your search for a home in Destin, Florida.