Closing costs vary depending on multiple factors, such as the specific property, the terms of the mortgage, and the type of loan. Here’s a breakdown of typical closing costs for a $2,000,000 condo in New York City when financing 80% of the purchase price ($1,600,000 mortgage):
- Mortgage Origination Fee: This is the fee charged by the lender for processing the loan. It typically ranges $500 to $1500 or so.
- Mortgage Recording Tax: In New York City, there’s a mortgage recording tax applied to the mortgage amount. For a mortgage over $500,000, the tax rate is 2.175% in New York County (Manhattan) and 1.925% in other boroughs. For a $1,600,000 mortgage in Manhattan, this would be $34,800.
- Title Insurance: This protects the lender and buyer against any unknown issues with the property’s title. Title insurance premiums are usually around 0.5% to 1% of the purchase price. For a $2,000,000 condo, this would range from $10,000 to $20,000.
- Appraisal Fee: Lenders require an appraisal to determine the property’s value. Appraisal fees for a high-priced condo in NYC can range from $500 to $1,500 or more, depending on the complexity of the appraisal.
- Home Inspection Fee: Although not always required for condos, it’s a good idea to have a home inspection. Inspection fees can range from $400 to $1,000, depending on the size and complexity of the property.
- Attorney Fees: In New York, it’s customary to have an attorney represent the buyer during the transaction. Attorney fees can vary widely but might range from $2,500 to $5,000 or more for a high-priced condo.
- Bank Attorney Fee: The lender will also have an attorney, and the buyer is usually responsible for their fees, which can range from $500 to $1,500.
- Miscellaneous Fees: These include credit report fees, flood certification fees, tax service fees, and other small charges that can add up. Expect to pay around $500 to $1,000 for these miscellaneous fees.
- Prepaid Expenses: These include prepaid interest, property taxes, and homeowners’ insurance. The exact amounts depend on the specific property and timing of the transaction.
- Mansion Tax: In New York, there’s a “mansion tax” applied to residential properties sold for $1 million or more. The tax rate starts at 1% for properties between $1 million and $1.99 million, increasing incrementally for higher price tiers. For a $2,000,000 condo, the mansion tax would be 1.25%, or $25,000.
These are just some of the typical closing costs associated with buying a condo in New York City. Keep in mind that these numbers are only estimates and can vary based on your specific situation. It’s essential to consult with your mortgage lender, attorney, and real estate agent to get an accurate estimate of the closing costs for your transaction.
