It’s essential with a homebuying checklist to ensure that the closing costs discussion happens sooner than later. The procedure of buying a home for the first time has a lot of different moving parts. Also, those closing costs in Florida, whether in Orlando or Central Florida, can be pretty high.
Sometimes they can approach several thousand to tens of thousands of dollars. It’s all primarily based on the home value and the associated fees when buying that home.
How much are closing costs usually in Florida?
The average is nearly 2% of the home value of the property. In 2021, was a little over $4600. This charge is for a home around the $250K price range. This charge is significantly below the average price of a home in central Florida. This drop is due to the high valuation of the homes for the past few years, especially the past few months.
With the average home price maintaining around $339,000, that’s well over $6000 in closing costs! This amount is separate from a down payment and does nothing to add value to the property you’re going to buy. It also doesn’t do anything to reduce the mortgage and improve the equity.
These are just a few of the first steps to buying a house, eating up these fees. As if the pricing of a home and the investment for that first home weren’t enough.
What do these costs make up?
A lot of these you’re going to already have in your guide to buying a house. It’ll be included in your homebuying checklist when you’re in the process of buying a home for the first time in Florida. These are broken down by items related to the process and items related to the house.
Items associated with the process of buying a home for the first time or any time are loan origination fees (getting the mortgage). Also escrow fees, lawyer fees, credit score reports, and anything related to financing the property.
When it comes to fees related to the home, there’s everything from home insurance, title insurance transfers, Appraisals (also necessary for the mortgage), Florida real estate transfer tax, AND Florida property taxes. It’s a bit intense, and these items add up but are necessary to add up in the home buying checklist.
There are some ways to possibly avoid these fees or at least some of these fees. That’s specifically if you’re going to avoid getting a mortgage and switching immediately to an all-cash offer and staying liquid.
Things such as escrow fees and loan origination fees won’t be necessary to pay, and the aggregate savings can be pretty significant. Remember that not all expenses can be avoided, especially the transfer tax and taxes.
Still, it’s essential to know the differences. Especially when reviewing your homebuying checklist and the process of buying a home for the first time in central Florida.
Keep in mind the pros and cons of paying upfront the lump sum of a property in Florida or financing it for the long term.