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The high cost of refinancing in Florida

By SCOTT BARANCIK, Times Staff Writer
© St. Petersburg Times
published March 31, 2003

With interest rates near record lows, thousands of Florida residents are rushing to refinance their mortgages. But they're paying an unusually high price to do so.

A new study by Quicken Loans Inc. suggests that Floridians pay higher refi closing costs than do residents of any other state or the District of Columbia. Based on a $150,000 mortgage and a loan-to-value ratio of 70 percent, the typical Florida borrower pays estimated closing costs of $3,001, according to the Livonia, Mich., lender.

By comparison, homeowners in neighboring Georgia and Alabama are paying $2,090 and $1,968, respectively.

Quicken spokeswoman Elizabeth Jones cited one key reason behind Florida's costly closings: taxation. Most states don't tax mortgage refinancings, she said. But on a $150,000 loan, Florida charges a documentary stamp tax of $525 and an intangibles tax of $300.

In the past fiscal year, the intangibles tax on mortgages, for home purchases and refinancing, generated $333-million, according to the Department of Revenue. Of course, the high mortgage costs are one of the downsides of not having a state income tax.

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