Five closing fees you may be liable to pay when buying a New York home.
Today I’ll talk about a topic nobody likes: closing fees. It may not be your favorite part of the home-buying process, but it’s critical that you know what to expect when you purchase a home in New York. Here are five different categories of fees you might be on the hook for:
1. Lender fees. These are collected at the beginning of the mortgage application and at closing. They may include your application, appraisal, credit report, option origination or discount, and miscellaneous processing and documentation fees that you could be charged if you choose to buy down your rate.
2. Title insurance fees. Your title company will order a municipal search, lien search, and survey inspection. The title insurance premium is a one-time fee collected at closing, and it’s based on the loan amount and the purchase price.
“You may have to pay as much as six months’ worth of taxes.”
3. New York State fees. There are two taxes I call the “Welcome to New York” fees that you may have to pay. The New York State mortgage recording tax is 1% to 2% of the loan amount, depending on the county. The mansion tax is 1% of the purchase price, but this only applies to properties worth $1 million or more.
4. Property taxes and escrows. Taxes will be collected at closing, and the lender will estimate an amount at escrow that could be up to six months’ worth of taxes, depending on when the next tax payment is due.
5. Attorney’s fees. Buyers are responsible for the bank attorney fee, and will need to retain an attorney for the contract signing and closing.
It’s critical to get pre-approved for your home purchase as a buyer before you start the process. When you do, your lender should provide a good-faith estimate of all your expected closing costs.
If you have any questions about these fees or real estate in general, call or email me. I would love to help you
