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Title Tuesday #6
 

 

Title Insurance: Closing Costs Explained   

"Title Tuesday" continues with an overview of Closing Costs. 

Closing costs are expenses 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.

 

 

 

 

Title Insurance is just ONE of the costs in "Closing Costs"

 

 

 

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 Premiums:

  • Fee Insurance - Insures the owner’s interest in the title to the property. The premium is based on the purchase price. 
  • Mortgage Insurance - Required by the bank when a mortgage is sought, the mortgage policy insures the lender’s lien position and priority. The premium is based on the amount of the mortgage. 

Endorsements:
Most lenders typically require that the borrower purchase standard endorsements to the mortgage insurance policy: 

  • Waiver of Arbitration
  • 8.1 Environmental Lien 
  • Residential Mortgage  

Other Company Charges: 

  • 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 fees. 
  • Municipal Searches* - Includes searches for building violations, fire department violations, copiy of Certificate of Occupancy, open permits, and a street maintenance report. All information is obtained through the local municipality and used for informational purposes only. Most lenders and attorneys require this information before closing. 
  • Patriot Search* -  All buyers’ and sellers’ names are run through a national database. This helps prevent terror funding through property investment. 
  • Bankruptcy Search* - The names of the buyers and sellers are run through a national database to find any filed or recently discharged bankruptcy. Seller’s in certain types of bankruptcy cannot sell property without a bankruptcy judge’s approval. 
  • Survey Inspection (of an existing survey) - A visual inspection of the subject property done by a non-surveyor that notes any major changes.  The survey must be certified and meet other minimum standards in order to be inspected or a new survey may be required. 
  • Escrow Service Fee - Charge for collecting, holding, and paying a property tax or other lien. 

Estimated Recording Charges 

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 agreement. 

  • Deed (withTP-584 & RP-5217) - The charge to record the deed in the Office of the County Clerk which conveys the property from the seller to the buyer. Also includes the cost to file the TP-584 and RP-5217 which are required by the state. 
  • Mortgage - The charge to record the mortgage in the Office of the County Clerk  

Sales Tax - (*taxable items) New York State requires that we collect sales tax on the sale 

State and Local Taxes 

  • 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 is 1% of the total mortgage amount, of which the buyer will pay 75% and the lending bank pays 25% in most cases. 
  • 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. 
  • Mansion Tax: New York State imposes a real estate transfer tax on conveyances of real property valued over $500, which in most transactions is paid by the seller. However, 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. 

 

 

 

Title Insurance Cost Comparison & Closing Cost Fee Calculator

By visiting tbtitle.com home buyers can quickly and easily create a custom closing cost estimate.  This will also show the savings available by choosing Thoroughbred Title as compared to typical competitors.  

 

 

 

Mobile Calculator

It's quick. It's easy. It will save you and your home buyers time. By quickly entering the purchase price, mortgage amount and property location  you can have an instant customized closing cost quote on your phone.  

To install the web app, just visit the rate calculator on your smart phone and add it to your home screen.