What are Closing Costs?

Closing costs are an unavoidable expense associated with the purchase of property. They’re comprised of two categories: bank/mortgage-related expenses and title-related expenses. Title insurance is just one of the costs of closing a purchase.

BANK/MORTGAGE-RELATED EXPENSES: These are the costs incurred in obtaining the mortgage to purchase your property. For an explanation of bank-related expenses please speak to your lender.

TITLE-RELATED EXPENSES: These expenses are typically incurred to complete the transfer of title and to record the necessary documents associated with the closing. They include:

Title Insurance: Title insurance is comprised of a few parts: the title report, the title Owner’s insurance policy, and the lender’s title policy with standard endorsements.
Title Company Searches and Service Fees: These include additional searches and services performed in conjunction with issuing a title report or policy, such municipal searches, Patriot name searches, bankruptcy searches, survey expenses, taxes and escrow/courier fees.
Recording Fees: To record a document in the State of New York, the original fully-executed documents must be submitted to the County Clerk for recording, the fee for which varies by each county and document type. Examples of standard documents to be recorded by a buyer in association with a home purchase include the deed and mortgage.
Mortgage Recording Tax: For purchases with a mortgage, a one-time mortgage recording tax is assessed against the home buyer, which will vary by county and mortgage amount.
In New York State, the mortgage tax varies by county and is between .75% and 2.175% of the total mortgage amount. Use our rate calculator or mortgage tax guide for more details.
Transfer Tax: New York State imposes a real estate transfer tax on conveyances of real property when the consideration exceeds $500. The tax is computed at a rate of $2.00 for each $500 and is generally paid by the seller using form TP-584. New York City, Yonkers, Mount Vernon, Peekskill and a few other Cities have different amounts. Use our rate calculator for more details.
Mansion Tax: For home purchases with a sale price of $1,000,000 or more, New York State imposes an additional transfer tax of 1% of the sale price to be paid by the purchaser. New York City transactions may have a higher rate. Use our rate calculator for more details.