US CLOSING COSTS
Thank you so much for the tremendous response to our recent announcement of the Orlando Builder Close-Out Sale.
For those of you proceeding with purchasing one of these unprecedented bargains we thought it might be helpful to review one of the major cost items associated with investing in Florida property: “Closing Costs” or “Settlement Fees”.
US Closing Costs can represent 4-5% of the total cost of investing in Florida property – and therefore should be understood thoroughly before you invest!
Needless to say, we can help you with any questions that you might have.
In the meantime following is an article on US Closing Costs from today’s issue of the US Helium magazine:
Overview on a home buyer’s recurring and non-recurring closing costs
by Gene Patterson
Closing costs are an unavoidable part of getting a mortgage or refinancing. In a buyer’s market it is possible to get the seller to cover many of the closing cost fees. But in a seller’s market where the properties are “hot” this is unlikely to happen.
What is a closing cost?
The closing costs are all of the little fees that are associated with buying a house. It includes things like appraisal fees, application fees, title search, credit report, origination points and a lot more. The amount of the closing costs can vary greatly depending upon the loan that they are based off of. They can conceivably get as high as 4-5% of the price of the home. Closing costs are broken into two separate type of costs: recurring and non-recurring closing costs. Both fees are due to be paid at closing and the homeowner will be required to pay the recurring fees annually.
Non-recurring closing costs
These are the closing costs that are all one time only fees. These fees include: title insurance policy, wiring fees, credit report, lender fees, courier fees, escrow fees, notary fee, appraisal fees, government filing fees and title search. These fees are due at closing and if the right deal is made can sometimes be absorbed by the seller rather than the buyer. They are a onetime only fee.
Recurring fees on the other hand are going to have to be paid every single year. Hence the word, “recurring”. These fees include:
Property taxes: for the first year, how much of the taxes you owe as the “buyer” depends on when you purchased the home. You are only on the hook for the taxes while you live there. Structure the home buying agreement right and all of the upfront (first year) closing costs will be covered by the seller.
Interest: Of course the loan will accrue interest that will have to be added to the principal and paid over time.
Homeowners Insurance: Your lender will likely stipulate a minimum amount of homeowners insurance you must have as long as your loan is in effect
Recurring costs can either have the annual closing costs paid out each year or have it rolled into the mortgage for simplicities sake.
See, once you break it down the difference between recurring and non-recurring closing costs is not that hard to understand.
——–
For those of you who have not yet found exactly what you are looking for in Florida’s exciting Buyer Market why not let us help you with your search?
We have information on over 20,000 homes in the Disney/Orlando area of Central Florida alone!
We also have “listing” information on many bargain-priced beach-front homes on the Sunshine State’s beautiful sandy coast – from Tampa to Miami.
Happy house-hunting and great savings!
And please tell your friends (they can share the purchase, use and rental income) – the time couldn’t be better!
Sincerely,
Bill Cowie President
Orlando Office: 407 396 9914
British-American Chamber of Commerce Advisory Board
