CLOSING COSTS WHEN BUYING A HOME IN NEW YORK
When contemplating a home purchase, there are certain closing costs and expenses a purchaser can expect to pay. Among residential homes, condo and co-op apartments, there are differences in closing costs.
There are also addition fees when a lender is involved in the financing of the purchase, in the form of origination fees, appraisals, and processing the loan application. If you are buying a house, an engineer report is generally recommended, with additional fees for termite inspection, fuel tanks, lead based paint and other hazards. If there is no current survey acceptable to the lender, a new survey preparation will likely be required, which could run up to $1,000.00 or more, depending on the size and number of structures on the property. If there is a current survey that is approved, then a survey inspection will be sufficient. For house purchases, the purchaser is usually required to pay for homeowner’s insurance prior to closing, which is typically the face value of the mortgage or a 100% guaranteed replacement value policy. Of course, it is generally recommend that even without financing, a prospective homeowner should secure homeowner insurance.
At closing, a purchaser must pay for a one time premium for title insurance, which protects both the purchaser and lender against a defect in the chain of title to the premises.
Title insurance rates are regulated by the State of New York, and accordingly, no company can charge more than the other. Premiums are lower if the purchaser is not obtaining a loan. Other fees are charged including various searches, endorsements required by the lender and other fees for deed recording of the deed, mortgage and other documents at the county clerk. As for co-op and condos, there are lien search fees, UCC-1 Filing Fees, Managing Agent Fees, damage deposits, and other adjustments. New York imposes a tax on the purchaser based on the amount of the loan, as well as “mansion tax” of one percent for purchases over $1,000,000.00. Lenders also collect monies for points, private mortgage insurance, and funds to be held in escrow reserve account, to pay for upcoming real estate taxes and insurance premiums. It is customary to give a gratuity or attendance fee to the title closer at the table for handling the closing, ranging from $150-$250. Last, but certainly not least from this lawyer’s view, attorney fees are a critical closing cost, and usually run from $1,200.00 to $1,600.00 for a typical residential purchase, depending on the difficulty of the transaction and contingencies, i.e. financing, title work, etcetera.
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