NYC Home Buyer’s Closing Costs Calculator

If you are purchasing property for $1 million or more in New York, you will be responsible for paying a mansion tax on that property. Depending on the purchase price, this can range from 1% of the purchase price to 3.9% for properties with prices of $25 million or more.

Title insurance covers a buyer or lender from issues that may arise with the legal title of the property. While an owner’s policy is not mandatory in New York, it is usually suggested.

In any real estate purchase other than a co-op, the transaction document, or deed, will be filed with the county records. The same is true for a mortgage document. Recording in the public records carries a recording fee for each document.

Mortgage financing on single-family, multi-family, and condo properties in New York City are subject to a mortgage recording tax. A buyer can expect to pay 1.8% on mortgages under $500,000 and 1.925% on any mortgage over $500,000. New York state imposes a mortgage tax of 0.5% of the mortgage amount. Co-ops are not subject to these taxes.

When a property transaction includes mortgage financing, there are various fees that will be imposed by the lender and will vary depending upon which lender you are using. These will typically include:

• Mortgage application and processing fees – Your lender may charge you for administrative costs for processing and approving your mortgage application
• Credit check – In order to approve your mortgage, a lender will need to run a credit check and may charge a fee at closing.
• Property tax escrow – A lender will typically pay property taxes out of an escrow account each year and will take an upfront figure based on the previous year’s tax bill. You will then pay increments to be held in escrow with each monthly payment. 
• Homeowners insurance escrow – A lender will generally require that the property be properly insured at all times and may escrow to pay this annually. 
• Appraisal fee – To ensure the value of the property, the lender will order an appraisal, which you will pay for at closing.
• Attorneys fees for the lender’s attorneys
• Prepaid interest – At closing, you will be charged pro-rata for daily interest up until the time of your first mortgage payment. 
• Mortgage title insurance policy – Like an owner’s title insurance policy, a lender will want to ensure that there are no title defects on the property and want to be insured against any issues that may arise.
• Surveys – For single and multi-family properties, a survey is often needed by the title insurer to understand the legal boundaries of the property and guard against possible encroachments.
• Inspections that the lender may require – In some cases, a lender will require property inspections that will be paid at the time of closing.

If you are purchasing a co-op or condo, they will impose their own closing and application fees. 

Co-ops are not regarded as “real property” in New York. Instead of purchasing a unit in a building like a condo, you are becoming part of a cooperative group of investors in a building that is owned by the corporate whole of the people who live there. Consequently, others who live there will take a great stake in who they accept as another shareholder and how that buyer will fit in. Although still subject to the New York mansion tax, closing costs in a co-op transaction are unlike other real estate transactions and will vary from co-op to co-op. They typically include:

• Board application fees
• Move-in deposit
• Move-in fees
• Lien search fees
• Credit checks
• Transfer agent fees
• Attorney fees

Condos are considered real property in New York, but buyers are also subject to board approval and the costs associated with maintaining the common areas of the building itself. Consequently, the board will impose various criteria when approving a new buyer and fees that come with that approval process.

While New York City and New York State transfer taxes are typically paid by the seller, these are usually passed on to the buyers in the case of new developments. The New York City transfer tax is 1% of the purchase price up to $500,000 and 1.425% on anything priced over $500,000. New York state transfer taxes are $4.00 per $1 million of the purchase price, or .04%.