How much money do I need for closing?

New homeowners often have questions about closing costs. Who pays closing costs (buyer versus seller) varies by transaction, and not every transaction includes every closing cost listed.

In Florida, budgeting 3% – 5% of the purchase price is a good rule of thumb.  The higher the loan amount, the higher the cost, although some costs are fixed and the same no matter the amount.

If you are shopping around for a lender, take a close look at this list and ensure you understand which fees are associated with each lender’s offer, and, of course, the amount of each.

Comparing apples to apples is more than just cost. The intangible value of having someone you trust to give you up-front honest answers; it may make the difference in meeting and/or continuing with your contract to purchase.

There is only one fee from your lender… the origination cost.  All other fees, although provided by the lender, are an estimate of third party costs.

It is important to beware of low quotes, realizing that they may increase later.

Closing Costs 

(estimate only, and may vary with property type, loan type, etc.)

Lender Fees:

  • Origination charges – these include underwriting, processing, tax service, etc.

Optional Lender Fees:

  • Discount points – the buyer may choose to pay “points” (i.e. pre-paid interest) for the benefit of a lower interest rate.

Services you cannot shop for:

  • Appraisal – $400 – $500
  • Credit report – $35
  • Flood certification – $15

Services you can shop for:

  • Title fees – charged by your title company for providing clear transfer of ownership.  $850
  • Title lender’s policy  – cost schedule is set by the state and depends on your loan amount.
  • Survey – ordered by the title company.  $350

Taxes and Government Fees

  • Recording – record the deed and note with the county.  $225
  • Transfer taxes – doc stamps and intangible tax to the state.  Calculated at .0055 x loan amount.

Pre-paid Items

  • Insurance – one year up front plus three months to start escrow.
  • Taxes – three months escrow.
  • Interest – calculated at a per day rate x the number of days left in the month up to the closing date.


  • Optional owner’s title policy.  When doing a duplicate issue (since the lender is also getting one), the amount is cheaper.
  • Miscellaneous optional items.

Certain costs must be within government tolerance levels.  There is room to play, however.

While comparing estimate is helpful, the best thing you can do is choose an experienced, knowledgeable loan originator.  Trust that they have your best interest in mind.