Real estate experts say this is a great time to buy a home in Ocala, Florida, which is a growing community centrally located in the Sunshine State. Most people who buy a home choose to finance the purchase with a mortgage. That means they often focus on finding the best interest rate. However, they should also think about something called closing costs.
What are Closing Costs?
These are the fees related to purchasing a home, which come from lenders and third parties, such as your local government, real estate agent and insurance company. The buyer typically pays these costs at the time they close on their mortgage. These fees are in addition to the down payment you pay.
What Charges go into Your Total Closing Costs?
Numerous charges are bundled into the total owed for closing costs, and they can vary by location. Lenders and third parties charge fees for things that can include running a credit report, an inspection of the home, an appraisal, a survey of the property borders, a title search, title insurance and other items.
In Ocala, some of the fees typically paid at closing in other states are actually paid in advance. However, some fees are only paid at the actual closing. That includes:
- inspection fees
- the appraisal
- documentary stamps on the mortgage, which is a tax paid to the local government
- application fee
- credit report
- loan origination fee
- title insurance
- mortgage insurance
- hazard insurance
How Much Will You Pay in Closing Costs?
Experts say you can expect to spend anywhere from 2 percent to 5 percent of what you paid for the home in closing costs. If the purchase price of your home is $100,000, expect to pay $2,000 to $5,000 in closing costs.
Your lender is required to provide an estimate of closing costs within three days after you apply for a loan. However, many items that make up this good faith estimate could be off by as much as up to 10 percent. The lender will provide a final line item accounting of closing costs one day before the closing.
How Can Home Buyers Avoid Closing Costs?
You can negotiate many of the fees in the bundle of closing costs. That especially applies to fees from your lender for courier or mailing costs or high administrative costs. You can also negotiate with the seller to pay part or all the closing costs. Additionally, ask lenders ahead of time for a breakdown of their typical fees and compare or consider a no closing-cost loan.
Buying a Home in Ocala, FL
As you choose a home and negotiate its price, it can help to keep closing costs in mind to keep those fees down. Another key is to close later in the month since it will lower the amount of interest you have to pay at closing. If you’re currently looking for a good place to call home, consider some of these popular listings in Ocala, FL: