So, you’re thinking of buying a home in Florida and looking at the process of finalizing a home loan or mortgage deal, and now have to factor in how much you’ll need to spend for closing costs. Another term for closing costs is settlement costs. These are fees that you have to pay, specifically towards the end of the negotiation process. Some of these fees are related to the state where the home is located, while others are connected to your lender and the mortgage type you’re working with.
Here are some helpful tips on how using a closing cost calculator can help you.
1. Gives you a structured list of the closing cost fees
If you’re looking to be a new homeowner, your main focus when preparing for your purchase is to save up for the down payment and to compute for your monthly payments. Upon closing the deal, a few more expenses still have to be paid, and these fees take care of all the finance and banking charges, as well as other administrative costs. When you use a closing cost calculator, you’ll have an exact figure of what you need to settle at the end of the deal. Even if you’re not an expert on real estate or on loans, you won’t be caught by surprise at the closing cost you have to pay for. As you go through the process of applying for a loan and purchasing a home, you’ll have a running idea of how much your closing cost will possibly be and be prepared for it. Moreover, the closing cost calculator gives you an idea of specific fees you may be missing out on. If you have any questions about any item in the calculator, you may bring this up with your broker or real estate agent early on in the negotiations.
2. Closing cost calculator can orient you about other fees involved
What constitutes the total closing costs may vary from deal to deal, and some brokers already include these costs in the initial agreements. Here are some examples of costs that the calculator app will show you and that you have to factor in when saving money for your home:
- Application fees are the fees incurred to start and proceed with the application of a loan for a housing purchase. It’s a generic term that may cover a lot of administrative expenses.
- Attorney fees are payments for the attorney who’ll review and certify all the documents covering the agreement, which may have been requested either by you as the buyer or the other party, the lender.
- Appraisal fees are the charges being billed by the appraisal companies, which give the fair market value of a property to be referred to by the lenders and buyers.
- Home inspection (if applicable) fees are payments given to a third-party representative to inspect and verify the house’s condition, and whether it agrees with the description of the sellers.
- Survey (if applicable) fees are the costs incurred during the surveying of the property lines and boundaries, ensuring that the ends of the property are defined accurately by the original records and titles.
- Recording fees are the payments given to the local recording office, finalizing the deal and transfer of ownership and titles.
3. Having a closing cost calculator is convenient and useful for negotiations
Some real estate deals offer no-closing-cost mortgages, and these may appeal to uninformed buyers. One potential risk of taking this type of deal is that although you can save on the upfront costs, you may get hurt in the monthly payments, making your total payments much more than what you’d have needed to pay if you hadn’t waived the closing costs. Such calculators can come in app form, and these are easily accessible from your smartphone. The convenience that these closing cost calculators offer makes it easy for all parties to estimate the closing costs in real time and factoring in the location of the property. Keep in mind that, depending on where the home is located, your closing costs may vary greatly.