Florida closing costs: who pays what

Closing costs are the fees and prepaid items due when a home loan closes. In Florida they include a few state taxes and title insurance rules that other states do not have. Who pays what depends on your contract, your loan and your county, so treat this as a guide to the usual pattern, and check your own paperwork.

Taxes on the mortgage

• Documentary stamp tax on the mortgage: $0.35 per $100 of the loan amount (Florida Statute 201.08). On a purchase loan the buyer usually pays it.
• Intangible tax on the mortgage: 2 mills, which is 0.2% of the loan amount (Florida Statute 199.133). The buyer usually pays this too.
• Documentary stamp tax on the deed: usually $0.70 per $100 of the price. This is customarily the seller's cost, but the contract controls.

Example, not a quote: on a $320,000 loan, the mortgage doc stamps are about $1,120 and the intangible tax is $640.

Title insurance

Title insurance protects against problems with a property's ownership history, such as liens or recording errors. There are two policies:

• The lender's policy protects the lender. The buyer usually pays for it, and when it is issued together with an owner's policy the lender's premium is small.
• The owner's policy protects you. Florida sets title insurance premium rates by state schedule, so the base premium does not vary by title company, although qualifying discounts may apply. On a $400,000 purchase it is about $2,075. Who pays varies by county and by contract. In Northeast Florida the seller often pays, but not always.

Title companies also charge fees that are not regulated, such as a title search and a settlement (closing) fee. These can differ between companies, so ask for a written estimate.

Recording fees and other third-party costs

The county clerk charges to record the deed and the mortgage. Other third-party costs can include the appraisal, a survey, flood certification, a credit report and inspections your insurer or lender asks for, such as a four-point or wind mitigation inspection.

Prepaids and escrow

Prepaids are not fees. They are your own future costs paid early:

• Prepaid interest from the closing date to the end of that month.
• A full year of homeowners insurance, and flood insurance if it applies.
• A starting balance in your escrow account for property taxes and insurance, if your loan has one. Florida property taxes are paid in arrears, so lenders usually collect several months at closing.

Who usually pays what

Buyers usually pay their lender's charges, the mortgage taxes, the lender's title policy, prepaids and their own inspections. Sellers usually pay the deed doc stamps and any real estate commission, and often the owner's title policy in Northeast Florida. A purchase contract can shift costs between the two, for example with a seller credit toward the buyer's closing costs.

Estimate yours

The Florida closing costs calculator uses the published Florida rates to estimate the figures above for your price and loan. Your Loan Estimate, which a lender must give you within three business days of applying, shows the real numbers, and the Closing Disclosure you receive at least three business days before closing lets you compare the final amounts.