Florida buyers should expect closing costs that fall into a few groups: lender charges, title and settlement charges, government recording fees and Florida’s documentary stamp and intangible taxes, plus prepaid items like insurance, interest and the initial escrow deposit. The total depends on the price, the loan, the county and what you negotiate with the seller. Your Loan Estimate, which you receive within three business days of applying, lists your specific figures.
Before he became a loan officer in 2011, Michael Akialis spent about eleven years at a Flagler Beach title company doing real estate searches and closings. That time on the closing side of the table is why we like to walk buyers through these line items before they ever reach the closing table.
The main categories on your closing statement
Lender charges
These cover the cost of making the loan. They can include an origination charge, underwriting or processing fees, and any discount points you choose to pay to adjust your rate. Third-party services the lender requires, like the appraisal and credit report, show up here too.
Title and settlement charges
The title company or attorney handles the closing. Charges here usually include:
- A title search to confirm the seller can transfer clear ownership
- A lender’s title insurance policy, which protects the lender
- An owner’s title insurance policy, which protects you
- A settlement or closing fee for handling the transaction
- Endorsements that add specific protections to the title policies
Title insurance premiums in Florida are regulated by the state. In many Florida counties, who pays for the owner’s policy is customary but negotiable, and it is set in the purchase contract. Read that section carefully.
Florida taxes and recording fees
Florida charges a few transfer-related taxes that buyers in other states may not have seen before:
- Documentary stamp tax on the deed, which is commonly paid by the seller in Flagler County, though the contract controls
- Documentary stamp tax on the note, typically paid by the borrower when there is a mortgage
- Intangible tax on the mortgage, also typically paid by the borrower
- Recording fees charged by the county clerk to record the deed and mortgage
Rates are set by state law, and the Florida Department of Revenue publishes details at floridarevenue.com. This is general information, not tax advice.
Prepaid items and escrow
These are not fees so much as costs paid in advance. They often include the first year of homeowners insurance, flood insurance if required, interest from closing to the end of the month, and a starting deposit into your escrow account for future taxes and insurance.
How Florida insurance affects your cash to close
In coastal Florida, the insurance line can be one of the largest numbers on the closing statement. Most lenders require the first year’s homeowners premium to be paid at or before closing, along with a few months of cushion in escrow. If the home is in a high-risk flood zone, flood insurance is added on top.
Timing matters as well. During hurricane season, insurers may stop binding new policies when a named storm threatens. If that happens close to your closing date, it can delay things by days. Shopping for coverage early helps, and our guide to shopping for homeowners insurance before a Florida closing explains how.
Property taxes and prorations
Florida property taxes are paid in arrears, meaning the bill for the current year is paid in November or later. At closing, the seller typically credits you for their share of the year, and you pay the full bill when it comes due. Your escrow deposit is sized with this in mind.
Remember that the seller’s taxes may reflect a homestead exemption and years of capped increases. Your bill will be based on a fresh assessment. If the home will be your primary residence, apply for the homestead exemption with the county property appraiser by the deadline after you buy.
Ways to manage closing costs
- Compare Loan Estimates. They use a standard format, so lenders are easy to compare line by line.
- Ask about seller concessions. In some markets, buyers negotiate for the seller to contribute toward costs, within program limits.
- Look at assistance programs if you are a first-time or moderate-income buyer.
- Shop the services you are allowed to shop, which your Loan Estimate identifies.
- Time your closing date. Closing later in the month means less prepaid interest, though your first payment timing shifts too.
Closing costs and cash to close are not the same number. Your down payment, deposits already paid and seller credits all factor in. Our cash to close vs. closing costs worksheet helps sort that out, and the mortgage calculator shows the monthly side.
Frequently asked questions
Who pays documentary stamp tax on the deed in Florida?
In much of Florida, including Flagler County, the seller customarily pays it. That said, the purchase contract decides who pays, so check the terms before you sign.
When will I know my exact closing costs?
You receive a Loan Estimate shortly after applying and a Closing Disclosure at least three business days before closing. Compare the two, and ask about any line that changed.
Can closing costs be rolled into the loan?
On a purchase, closing costs generally are not added to the loan amount, though some program fees can be financed. Seller concessions or assistance may help cover them, depending on the program.
If you would like a walk-through of your Loan Estimate from someone who spent years on the title side, Michael Akialis is happy to help from our Flagler Beach office. Read about Michael’s background, visit our Flagler Beach mortgage loan originator page, or call (386) 793-5435.
Mortgage information is for educational purposes only and is not a commitment to lend or extend credit. All loans are subject to credit approval, property approval, underwriting guidelines, program eligibility, and availability. Program rules, rates, fees, and requirements can change. Michael Akialis, NMLS #832250; American Home Mortgage Group LLC, NMLS #1812447.