It will be written into the contract and the title company will be responsible for the closing and compiling the accurate charges to close. But when a buyer shops for a home they need to determine a budget for a purchase price, a budget for down payment, and budget enough for closing costs.
How can you determine the estimate before shopping for a home?
You can estimate to 3-4% of the purchase price for a resale, and 5-6% of the purchase price for new construction. This is based on a buyer purchasing with financing and includes prepaids to pay into your lenders escrow account for future taxes and insurance. If you are purchasing a resale with cash its typically between 1-2% of the purchase price.
I am under contract on a home, now what?
If you are financing a property, your mortgage broker will be able now give you an estimate of each individual charge, so you can drill down to a more accurate cost. However, at this point some charges cannot be accurately determined such as taxes, insurance, HOA initiation costs, survey and appraisal costs until you are further into the transaction, so estimate will be given.
When do you get all the accurate closing costs?
A few days before closing you will get a HUD statement which is the final list of itemized charges from the title company which includes lender, title charges, and prepaid taxes and insurance. At this point the charges are accurate, not estimates. Prior to receiving this HUD statement your buyers agent, and lender will double check the figures. This HUD statement will also contain the dollar amount you need to bring to closing.
Need help understanding Central Florida closing costs, please contact our office for any questions.