Understanding Closing Costs
Know what to expect at closing so there are no surprises. We break down every fee so you can plan ahead with confidence.
What Are Closing Costs?
At your loan closing, you will be required to pay your down payment plus closing costs. In most cases, closing costs range from 3% to 6% of your total loan amount. Some fees are paid upfront when you submit your application, while others are due at the closing table.
Depending on your loan program, some closing costs may be rolled into your mortgage, reducing the amount of cash you need at closing. Your loan officer will provide a detailed Loan Estimate early in the process so you know exactly what to expect.
Pro tip: Ask your Home Financial Group loan officer about seller concessions, lender credits, and assistance programs that may help offset your closing costs.
Common Closing Costs Explained
Loan Origination Fee
Charged by the lender for processing the loan application. This fee is typically around 1% of the total mortgage amount and covers the administrative costs of underwriting and funding your loan.
Credit Report Fee
Covers the cost of pulling your credit history from the three major credit bureaus. Your lender uses this report to evaluate your creditworthiness and determine your interest rate.
Appraisal Fee
Pays for a professional appraiser to assess the fair market value of the property. The lender requires this to ensure the home is worth the amount being financed.
Survey Fee
Covers the cost of a land survey to confirm the property boundaries and identify any encroachments or easements that could affect ownership.
Title Search Fee
Pays for a thorough search of public records to verify the seller has legal ownership of the property and to uncover any liens, judgments, or claims against the title.
Title Insurance
Protects against future claims on the property's title. Lender's title insurance is required and protects the lender's interest. Owner's title insurance is optional but recommended, as it protects your investment.
Discount Points
An optional upfront payment to lower your interest rate. One discount point equals 1% of the loan amount and typically reduces your rate by approximately 0.125%. This can save money over the life of the loan.
Recording & Transfer Fees
Government fees charged to officially record the new deed and mortgage documents with the county. Transfer taxes may also apply depending on your location in Florida.
Interim Interest
Also known as per diem interest, this covers the interest that accrues from your closing date through the end of that month. Your first regular mortgage payment then begins the following month.
Property Taxes (Prorated)
Property taxes are prorated between buyer and seller based on the closing date. You may need to pay your share of taxes for the remainder of the tax period at closing.
Escrow Account Payments
Your lender may require you to prepay several months of property taxes and homeowners insurance into an escrow account. These funds ensure your taxes and insurance remain current.
How to Prepare
- Review your Loan Estimate carefully when you receive it. This document outlines all expected fees.
- Compare your Loan Estimate to the Closing Disclosure you receive at least three days before closing.
- Ask your loan officer about any fees you do not understand. There should be no surprises at the closing table.
- Budget for closing costs early. Use our Mortgage Calculator to estimate your monthly payments.
Questions About Closing Costs?
Our team will walk you through every fee and help you understand exactly what to expect. No surprises, just clear answers.