If you’re like many people buying a pet-friendly condo in Boca Raton, you know that you’ll have to pay closing costs – fees and charges associated with buying your new home. But what are closing costs when you buy a pet-friendly condo in Boca Raton, how much will they be, and can you lower them? Here’s what you need to know.
Closing Costs When You Buy a Pet-Friendly Condo in Boca Raton
Everyone has to pay closing costs when a home changes hands. Typically, these costs are expenses that buyers and sellers incur in the process of completing a real estate transaction. On average, closing costs total somewhere between 2 and 5 percent of a condo’s total purchase price.
What Are Closing Costs?
In plain English, closing costs are fees buyers and sellers have to pay in order to complete a real estate transaction. These costs can include fees such as:
- Loan origination fees
- Points, which some people pay to lower interest rates
- Appraisal costs
- Condo Owners’ Association dues
- Credit report fees
- Deed recording fees
- Home inspection charges
- Insurance escrow for homeowners insurance (if you’re paying it as part of your mortgage)
- Notary fees
- Private mortgage insurance premiums
- Property tax escrow (if you’re paying it as part of your mortgage)
- Title insurance policy premiums
Here’s a closer look at each.
Loan Origination Fees
Loan origination fees go directly to your lender. They’re supposed to cover the lender’s administrative costs to process your application. This fee usually accounts for about 1 percent of your loan amount – but some lenders don’t charge them; instead, lenders that don’t charge origination fees may charge higher interest rates to cover their costs.
Points – commonly called discount points – are optional, up-front payments you may be able to pay your lender in exchange for a lower interest rate on your loan. A lower interest rate will likely decrease your monthly payments. One point equals 1 percent of your loan amount.
Related: How to find a condo in Boca Raton accepting pets over 40 pounds
Your lender will require an appraisal, and they’ll tell you to pay for it. The appraisal tells the lender how much the condo is worth so that the lender doesn’t give you too much money to buy it.
Condo Owners’ Association Dues
When you buy a condo, you also buy into an organization designed to preserve property values – that’s the condo owners’ association. The association charges dues that it uses to maintain common areas, perform building-wide maintenance and make repairs as necessary. Your dues will be payable annually, quarterly or monthly, depending on the association’s rules, and you may have to pay them before you can take possession of your new condo.
Credit Report Fees
In comparison to other closing costs, credit report fees are relatively low. They cover the cost your lender incurred in pulling your credit report to make a lending decision; the fee typically ranges between $15 and $30.
Deed Recording Fees
Your local recording office – usually at the city or county level – will charge a fee for recording your deed.
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Home Inspection Charges
If you’re like many people, home inspection charges won’t be payable on closing day; you’ll have to pay them directly to your inspector based upon your agreement. A home inspection can cost a few hundred dollars.
Insurance Escrow for Homeowners Insurance
Lenders often require prepayment for your first year’s insurance premium when you close.
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You may be responsible for paying a notary’s fees for notarizing your documents. Often, you’ll pay them directly to the notary during the application process – such as when your lender requires you to send in a notarized document. Like credit report fees, these charges are usually nominal.
Private Mortgage Insurance Premiums
If you’re putting down less than 20 percent of the condo’s purchase price, there’s a good chance your lender will make you pay for private mortgage insurance, or PMI. You may be required to make your first month’s payment of PMI at closing.
Property Tax Escrow
You may have to pay property taxes that are due within 60 days at closing. You may also have to put money in your property tax account with your lender, if your lender pays the property taxes for you after tacking them on to your monthly mortgage payment.
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Title Insurance Policy Premiums
Title insurance protects the lender against claims of ownership that come from other people. You’ll have to pay for this insurance – and you may also want to buy a homeowner’s title insurance policy, too.
How Much Are Closing Costs if You Buy a Pet-Friendly Condo in Boca Raton?
Closing costs are usually between 2 and 5 percent of a condo’s total purchase price. For example, if you buy a $300,000 condo, your closing costs could range between $6,000 and $15,000. That’s a big range – but you don’t have to worry that these costs will surprise you at the last minute. You’ll get a loan disclosure before closing day that describes all the fees you’ll have to pay. If you see discrepancies between your original agreement and your closing disclosure, call your lender and ask for an explanation.
Can the Seller Pay Your Closing Costs?
Sellers can pay some or all of your closing costs in Florida. You can talk to your Boca Raton pet-friendly REALTOR® to negotiate with the seller about it – the person selling your condo may be willing to pitch in to help seal the deal.
Related: Must-read tips for buying a home with pets
Can You Lower Your Closing Costs?
You can lower your closing costs in several ways. One of the most notable is by asking the seller to pay some or all of them – but you may also be able to negotiate with your lender about some of the fees. Some lenders are willing to negotiate to earn (or keep) your business.
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