When purchasing a home in New York the buyer is responsible for paying the buyer’s closing costs. The buyer’s closing costs can range in amounts but there is a general outline of the type of costs that can be expected. Below is a simple breakdown of buyer’s closing costs in New York and a brief description of each cost that may be applicable when purchasing a home in New York:

TITLE BILL

1) Mortgage Tax – There is a tax based on the amount of the mortgage. NYS charges .8% ($8 per $1000 borrowed) and NYC charges an additional 1% ($10 per $1000) for loans up to $500,000.00.  For loans above $500,000.00 the NYC portion of the tax increases.

2) Title Insurance – this is insurance to make sure there are no issues with the title being given to you from seller.  The title insurance report protects you against monetary losses due to title problems and the cost of defending your title if someone disputes your ownership.  In NYS the cost of title insurance is set by statute.
3) Owners Policy - also called a Fee policy this is the title insurance purchased by the buyer.  It is based on the purchase price of the property and lasts for the life of the owner.

4) Lenders Policy – Mortgage policy – based on loan amount and it protects the lender.  Unlike the owner’s policy the mortgage policy needs to be taken out if the property is refinanced
5) Municipal Searches – normally done as part of the title search, these searches of city or township records done to determine if there are any violations against the premises.  Typically include building, housing, sidewalk, highway, tax and water departments if applicable.
6) Survey – a description of the parcel of land being purchased.  Normally describes the dimensions and boundaries of the premises and the dimensions of the house.
7) Survey Inspection – if the seller has an accurate survey that is not too dated it is often acceptable to lenders that the existing survey be accepted with the title company doing an inspection to not any changes since the date of the survey.  Less costly that a new survey it is usually only a good idea to use the existing survey with an inspection if the property is the same as shown on the survey or the changes are minor.
8) Water Search – in NYC the Water Board handles billing of water accounts.  Prior to closing the seller should get a final water meter reading so the search will show that the sellers account is paid in full.
9) Tax Search – title company will request a search of the tax departments records to determine the amount of taxes on a property and if any taxes are due.
10) Dept of Buildings Search – done to make sure the structure is legal and has the necessary permits to allow it to be used as intended by the parties.
11) Highway Dept Search – NYC – search of records pertaining to sidewalks and curbs
12) Recording Fees - Deeds, Mortgages and other documents are taken by the title company to be put into the public records.  The recording office (normally the  county clerk) is entrusted with recording the documents and keeping the records of transfers and mortgages.  The clerk’s office charges fees for recording the documents normally by page amounts.
13) Bankruptcy Searches – searches of the local Bankruptcy courts to make sure none of the parties have filed for bankruptcy or have an open bankruptcy file.
14) Patriot Act Searches – search of the Treasury department to make sure the parties are not on the terrorism funding list
15) Title endorsements – the normal title policy excludes coverage for certain items.  To get around the exclusions additional fees are paid to purchase endorsements to the policy.  Owner’s can get a market value rider and there are several types of lender endorsements that a lender can make the borrower pay in addition to the cost of the mortgage title insurances.
16) Market Value Rider- the owners title insurance policy is based on the purchase price.  This rider is optional and increases the coverage if the value of the property increases.  Normal cost is 10% of the owner’s title policy premium.
17) Lender Endorsements – As part of the title insurance policy some lenders require special endorsements to cover items normally not insured by the policy such as condominium coverage or residential usage.
18) Title Closer Fee – NYC and Long Island – the title closer is sent by the title company to the closing to check and correct any documents needed to clear title are properly executed at closing.  Custom and practice has evolved that the title closer is paid a fee by the buyer for her service.  If the title closer needs to satisfy any liens of the seller’s side normally a service fee or pickup charge is also charged to the seller..
LENDER FEES

1)  Origination Fee – fees charged by the lender for processing the loan.

2)  Credit for Rate Chosen – this will increase or decrease the origination fee if the rate the borrower is getting is different than the rate offered by the lender.  A borrower can lower the rate by paying more (buying points) or decrease his closing costs by accepting a higher rate.

3)  Appraisal Fee – an estimate of value.

4)  Credit Report Fee

5)  Tax Service Fee

6)  Flood Certification Fee

7)  Daily Interest Charges

8)  Mortgage Insurance Premium

9)  Homeowners Insurance

10) Reserves Deposited with lender

11) Initial Deposit

12) Homeowners Insurance

13) Mortgage Insurance

14) Property taxes

15) Aggregate Adjustment

16) Title

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20) Application Fees

For additional information on the services our State Island law firm offers for home buyers contact Steven Decker, Esq. at 718-979-4300.