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.