✏️ Editor’s Note: Realtor Associations, agents, and MLS’ have started implementing changes related to the NAR’s $418 million settlement. While home-sellers will likely save thousands in commission, compliance and litigation risks have significantly increased for sellers throughout the nation. Learn how NAR’s settlement affects home sellers.
Home buyers are on cloud nine after buying their dream homes until they see the closing disclosure. It lists many additional expenses you have to bear as “closing costs.”
New York home buyers spend $16,849 on average in closing. These are out-of-pocket expenses you need to finance, buy, and own your home. Buyer closing costs largely depend on the location and can add up to several thousand dollars in some areas of the Empire State.
This hefty amount may startle first-time home buyers busy saving up for the down payment. As a rule of thumb, set aside 1.5% to 6% of the purchase price to cover the closing costs in New York. Start here! Apply for a home loan now.
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📌 Decoding Closing Costs in New York
- How Much are a Buyer’s Closing Costs in New York: Typical closing costs for a buyer in New York range between 1.5% to 6% of the purchase price.
- What Do Buyer Closing Costs Include: Buyer closing costs consist of one-time expenses of loan origination, notary, recording, and appraisal. It also includes recurring expenses like property taxes and homeowner’s insurance.
- How to Reduce Closing Expenses: You can ask for seller concessions, shop for lenders, or apply for closing cost assistance programs.
What are Closing Costs in New York?
Closing costs are the fees you pay to acquire a mortgage and buy a home. There are three categories of buyer closing costs:
- Property Related Costs: These include the costs to inspect, appraise, and survey the property. Additionally, taxes such as property tax and transfer tax also fall in this category.
- Paperwork Related Costs: These consist of real estate attorney fees, recording fees, notary fees, etc.
- Mortgage Application Costs: This includes the money you spend to finance your new home. Expenses like loan origination fees, application fees, processing fees, etc., come under this category.
For home buyers in New York, closing costs are an out-of-pocket expenditure. You cover them using a cashier’s check or with a wire transfer.
Who Pays Closing Costs in New York, Buyer or Seller?
In most New York real estate transactions, buyers and sellers share the closing costs. But buyers cover most of them. You can negotiate with the seller for concessions.
Home sellers can offer concessions only up to a certain percentage of the sale value. The seller concessions limit varies per the loan type and is as follows:
» Who Pays Closing Costs in New York: Learn Who Covers the Major Chunk of Closing Costs.
How Much are Closing Costs in New York for Buyers?
Home buyers in the Empire State can expect to pay 1.5% to 6% in closing costs. However, to estimate your closing costs more accurately, use the New York buyer closing costs calculator below:
How Much are Closing Costs on a Cash Deal in New York?
Cash home buyers pay lower closing fees or settlement charges. New York closing costs for cash buyers are around 1% of the purchase price.
Cash home sales don’t have a financing contingency. So, you skip mortgage closing costs as a cash buyer. Additionally, most cash buyers purchase homes as is which further helps them save on appraisal and inspection costs.
You can use the closing costs calculator for cash buyers in New York to get an estimate of closing your expenses.
What is Included in Closing Costs for Buyers in New York?
Here are some of the most common estimated closing costs for a buyer in New York:
| Loan Application Fee | Up to $500 |
| Loan Origination Fee | 0.5% to 1.5% of the mortgage value |
| Home Appraisal Fee | $300 to $500 |
| Real Estate Attorney | $70 to $550 per hour |
| Courier Fee | $30 to $50 |
| Credit Report Fee | $10 to $100 |
| Title Search Fee | $60 to $200 |
| Title Insurance Fee | Varies Across Counties |
| Discount Points | 1% of the mortgage value |
| Escrow Funds | At least 2 months of mortgage payments |
| Transfer Tax | Depends on the property value |
| Home Inspection Fee | $300 to $500 |
| Home Owners Insurance | $1,200 per year |
| Recording Fee | $120 to $150 |
Additional Buyer Closing Costs Per the Loan Type
You might have to bear additional buyer closing costs in New York if you opt for a specific type of loan. These may include the following:
| Private Mortgage Insurance (PMI) | 0.5% – 1% of your loan amount |
| FHA Mortgage Insurance Premiums | 1.75% of the loan amount |
| VA Funding Fee | 1.25% to 2.15% of the loan amount |
| USDA Guarantee Fee | 1% of the loan amount |
How to Avoid Paying Closing Costs When Buying a House?
There is no way to waive home-buying closing costs completely. However, here are some tips that can bring down your New York buyer closing cost estimates:
- Ask for Seller Concessions: You can ask the seller to contribute to your closing costs through concessions or credits. However, the percentage of seller concession varies per the mortgage type.
- Shop for Mortgage Lenders: Research mortgage lenders in New York and compare their rates. Choose a lender that has a lower mortgage cost and offers competitive rates for the loan of your choice.
- Research Closing Costs Assitance Programs: There are grants to assist buyers with government loan closing costs. Typically, local or state housing authorities or nonprofits offer these grants. Research the eligibility criteria for each type of grant before you apply.
Bottom Line
The closing cost percentage for buyers in New York accounts for 1.5% to 6% of the total purchase price. The exact closing costs depend on the type of loan, estimated home value, sale contingencies, and local laws.
You can ask for seller credits or concessions, negotiate with your lender, or opt for a no closing cost mortgage. You can also apply for state-sponsored closing costs assistance programs.
Ensure you account for the closing amount while you are busy saving up for the downpayment. Review the closing disclosure to know the exact closing estimates. Apart from funds, review and bring all the documents needed at closing.
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Frequently Asked Questions
1. How much are closing costs in New York if you pay in cash?
Closing costs in New York for cash buyers are around 1% of the purchase price. Cash home sales don't have a financing contingency. So, cash buyers skip mortgage-related closing costs. Additionally, most cash buyers purchase homes as is which further helps them save appraisal and inspection costs. You can use the closing costs calculator for cash buyers in New York available online to get an estimate of closing your expenses.
2. Are closing costs in New York high?
Average closing costs in New York are 3.1% of the buying price. This is higher than the national average of 1.81%.
3. When are closing costs paid in New York?
Closing costs are paid on the day of settlement when you transfer the funds and sign the paperwork for buying your house in New York.
4. How can I lower my closing costs in New York?
You can do the following to lower your closing costs in New York:
1. Negotiate seller concessions
2. Opt for a no-closing cost mortgage
3. Apply for closing costs assistance programs
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