Definition
Some states tax the mortgage or the deed when you buy a home. These are government fees added to your closing costs, calculated based on the loan amount and set by state law.
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Documentary stamps (also called doc stamps) are taxes required in certain states like Florida, Massachusetts, and a few others. The tax is applied to the mortgage note and sometimes to the deed. For mortgages, the stamps are typically $0.35-$1.00 per $100 of the loan amount. Documentary stamps must be paid before documents can be recorded and appear as a line item on the settlement statement.
Pro Tip
If buying in a state with documentary stamps, ask your lender for an estimate so you can budget for this cost.
Example
In Florida, a borrower with a $250,000 mortgage owes documentary stamps of approximately $750 ($0.30 per $100 × 2,500). This fee is paid at closing.