One of the first questions I get from buyers, especially those coming from abroad or from another state, is simple: how much money do I need to bring to closing? The down payment is only part of the answer. In Florida, buyers also pay a group of fees, taxes and prepaid items that we call closing costs. Here is what they are, who usually pays each one, and how to avoid surprises.
First, a word about the contract
In Florida, who pays what is not fixed by a single rule. Part of it comes from state law, part from local custom, and most of it from the purchase contract you sign. Almost everything can be negotiated. A seller can agree to pay part of your costs, and in some markets that is a normal request. So read this guide as the usual pattern, and remember that your contract has the final word.
Costs that come with your mortgage
If you are financing, the largest group of costs is tied to the loan. Each lender prices these differently, which is why comparing offers matters.
- Lender fees. Origination, underwriting and processing fees. Some lenders combine them, others list them one by one.
- Discount points. Optional. You pay money upfront to lower the interest rate. Whether it makes sense depends on how long you plan to keep the loan.
- Appraisal. The lender orders it to confirm the home is worth what you are paying. You usually pay for it, often before closing.
- Credit report and flood zone determination. Small fees, but they appear on every estimate.
Florida taxes on the mortgage
Florida charges two taxes when a new mortgage is recorded, and by custom the buyer pays them:
- Documentary stamp tax on the note: $0.35 for every $100 of the loan amount.
- Nonrecurring intangible tax on the mortgage: 2 mills, which is 0.2% of the loan amount.
These apply only if you borrow. If you pay cash, you do not owe them. There is also a documentary stamp tax on the deed itself, $0.70 for every $100 of the price in most counties. In a typical Central Florida sale the seller pays it, but check your contract, because it can be assigned differently.
Title insurance and the closing agent
A title company or a real estate attorney handles the closing in Florida. They search the public records, clear any old liens, prepare the closing statement and record the documents with the county.
- Lender's title policy. If you have a mortgage, your lender requires it, and the buyer pays for it.
- Owner's title policy. It protects you, the owner, against title problems from before you bought. In much of Central Florida the seller customarily pays for it and chooses the title company. In Miami-Dade and some other counties it is common for the buyer to pay. Again, the contract decides.
- Settlement and closing fees. The title company's own fees for handling the file. These vary by company.
- Recording fees. The county charges to record your deed and mortgage. They are modest compared with the other items.
Title insurance premiums in Florida are set by the state, so the premium itself does not change much between companies. The other title fees do, so it is fair to ask for an itemized quote.
Prepaid items and escrow deposits
This is the part that surprises buyers most, because it is not really a fee. It is money set aside for costs you would pay anyway.
- Homeowners insurance. Lenders usually require the first year's premium to be paid at or before closing. In Florida this can be a significant amount, and the age of the roof can affect both the price and whether a company will write the policy. Get quotes during your inspection period.
- Flood insurance. Required by the lender if the home is in a high-risk flood zone. Worth considering even when it is not required.
- Property tax reserves. If your loan has an escrow account, the lender collects a few months of property taxes upfront so the account has enough when the bill comes due.
- Prepaid interest. The interest from your closing day to the end of that month.
Property taxes are also prorated between buyer and seller. In Florida they are paid in arrears, at the end of the year, so the seller usually gives you a credit for the part of the year they owned the home.
Inspections and survey
These are usually paid before closing, directly to the inspector, and they are your choice and your cost:
- General home inspection.
- Four-point and wind mitigation inspections, which insurers often ask for on older homes. A good wind mitigation report can lower your premium.
- Termite (WDO) inspection.
- A survey, which some lenders and title companies require and which I recommend for single-family homes.
HOA and community costs
Many homes in the Orlando area belong to a homeowners association, and some are also inside a Community Development District (CDD). At closing you may see:
- Estoppel certificate. A letter from the association confirming what the seller owes. Florida law caps what associations can charge for it. Who pays depends on the contract.
- Capital contribution or transfer fee. Some communities charge new owners a one-time amount. It is in the HOA documents, so ask for them early.
- Prorated dues. Your share of the current HOA period.
CDD assessments usually appear on the property tax bill, not as a separate closing charge. Ask about them before you make an offer, because they affect your yearly cost.
How to see your real number early
Federal rules help you here. When you apply for a mortgage, the lender must send you a Loan Estimate within three business days. Before you sign, you must receive a Closing Disclosure at least three business days before closing. Put the two side by side and ask about any line that changed.
A few practical tips I share with my clients:
- Ask your lender for an estimate based on the real property, its taxes and its insurance quote, not on a generic example.
- If you are buying from abroad, send the funds early. International wires can take several days, and title companies will not close on funds that have not arrived.
- Never wire money based on an email alone. Call the title company at a number you already know to confirm the instructions. Wire fraud in real estate is real.
- Ask whether a seller credit toward closing costs makes sense in your negotiation. Your lender will tell you the maximum your loan allows.
If you are still getting your financing ready, my guide on preparing for mortgage approval covers the documents lenders ask for.
This guide is general information, not legal or tax advice. Your lender and title company will give you the exact figures for your purchase. If you want me to review an estimate with you or run the numbers on a home you like, send me a WhatsApp at (407) 773-9991 or book a free consultation. I work in English and Spanish.
Frequently asked questions
Who pays closing costs in Florida, the buyer or the seller?
Both. Buyers usually pay their loan costs, the taxes on the mortgage, the lender's title policy and prepaid items such as insurance and tax reserves. Sellers usually pay the documentary stamp tax on the deed and their own costs. In much of Central Florida the seller also pays the owner's title policy. The contract decides, and most items are negotiable.
Do cash buyers in Florida pay less in closing costs?
Yes. Cash buyers do not pay lender fees, the documentary stamp tax on the note or the intangible tax on the mortgage. They still pay title and closing fees, recording fees and any HOA items that the contract assigns to them.
What taxes does a buyer pay on a Florida mortgage?
Florida charges a documentary stamp tax on the note of $0.35 per $100 of the loan, and a nonrecurring intangible tax of 2 mills (0.2%) on the mortgage. By custom the buyer pays both. Confirm current rates with the Florida Department of Revenue.
When will I know my final closing costs?
Your lender sends a Loan Estimate within three business days of your application, and you must receive a Closing Disclosure at least three business days before closing. The Closing Disclosure shows the final figures, and the title company's statement confirms the amount to bring.
Have a question about your situation?
I answer personally, in English or Spanish, usually the same day.
Sources
This guide is general information, not legal or tax advice. Laws and figures change; confirm the details for your situation with a professional.