Miami Real Estate Learning Center

Calculating Closing Costs

Points and origination fees(Buyer only): These are also fees related to your mortgage. Discount and Origination Points are equal to a percent of the loan amount. 1.75 points is equal to 1.75% of the loan amount. Discount points represent additional money you can pay to the lender at closing. If you pay more points it will lower the interest rate. Paying points can be good only if you plan on living in the home for a long time. Origination Points (or Loan origination fee) charged by the lender for evaluating, preparing, and submitting a proposed mortgage loan. Origination fees are often expressed as a percentage. A one percent loan origination fee is equal to 1% of the loan amount.
Some lenders add origination points into their quoted points while other lenders add an origination point in addition to their quoted points.

Loan application fees and credit report(Buyer only): These are spelled out in your bankís Good Faith Estimate. Be sure they are the same when you get to the closing table. You can actually get your HUD statement 1 day before closing so you have time to read it carefully with the help of your realtor.

Title search and title insurance(Buyer only): A title search is a detailed examination of the historical records concerning a property. These records include deeds, court records, property and name indexes, and many other documents. The purpose of the search is to make sure the buyer is purchasing a house from the legal owner and there are no liens, overdue special assessments, or other claims or outstanding restrictive covenants filed in the record, which would adversely affect the marketability or value of title.

A certificate of title -- issued by a title company that did the title search -- offers no protection against any hidden defects in the title which an examination of the records could not reveal. A title insurance protects against any tax liens, unpaid mortgages, or judgments missed in the research of the history of title on the property. If a claim is made against your property, title insurance will, in accordance with the terms of your policy, assure you of a legal defense and pay all court costs and related fees. Also, if the claim proves valid, you will be reimbursed for your actual loss up to the face amount of the policy.

Basically there are two different types of policies - a lender's policy and an owner's policy. The lender's policy protects the lender's interest in the property as security for the outstanding balance under the buyer's mortgage. The owner's policy safeguards the buyer's investment or equity in the property up to the face amount of the policy. The cost of the policy is usually based on the loan amount.

Appraisal Fee(Buyer only): This fee pays for an independent appraisal of the home you want to purchase. The lender requires this estimate of the market value of the house for the loan.

Inspections(Buyer only): This fee is for the service of a professional inspector who visits your property and inspects it. It is particularly important if you are buying a house as the inspector can inspect the foundations.

Survey fee(Buyer only): The title insurance company or lender may require a survey of the property. If you are buying a condo, this fee is waived.

Lenderís and Buyer's attorney(Buyer only): This fee is to review and prepare all documents necessary for closing.

Documentary stamps on new note(Buyer only): The documentary stamps on the note is based on the amount of the mortgage. They are 0.35cents per $100.

Intangible tax(Buyer only): only for new mortgages. They are 0.2% of the loan amount.

Condominium application fee(Buyer only): They often range around $100.

Escrow account balances/prepaid: These are prorated depending on the closing date. The main items to prorate are the property taxes, the homeowners insurance and the maintenance fees. You could also buy a property with a tenant and will have to prorate his rental.

Documentary stamp tax on deed: (seller Only) The deed stamps are based on the sales price and are $0.70 per $100.

Realtorís commission: (Seller Only) At Condoideas we charge 6% commission paid from the seller.