Another Reason Housing Costs Are So High In New York: Government Taxes And Requirements On Closing Costs

Daily News

Homebuyers know and stats show that closing costs you a ton in New York

State is No. 1 in closing expenses for a third year in a row, Bankrate surveys

BY / NEW YORK DAILY NEWS

PUBLISHED: MONDAY, AUGUST 6, 2012, 11:42 PM
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BILL TURNBULL FOR NEW YORK DAILY NEWS. Would this Elmhurst, Queens, house work for you? Keep in mind that average closing costs total $5,435 for a $200,000 mortgage on a single-family home purchased with a 20% down payment. The cheapest state to get in the door with a mortgage is Missouri, with average costs of 3,006.

 

HERE’S ONE more reason why it’s so ridiculously expensive to live in New York: We have the highest mortgage closing costs in the country.

For the third year in a row, New York State leads the way in fees associated with getting a home loan, according to a new survey from Bankrate.com.

The average closing cost here is a whopping $5,435 for a $200,000 mortgage on a single-family home purchased with a 20% down payment.

Compare that with Missouri, the state with the lowest closing costs, where they pay an average of $3,006. The national average is $3,754.

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STOCKBYTE/GETTY IMAGES Good news for buyers, though, is that closing costs dropped 12% in New York, Bankrate said.

“Everything costs more in New York, doesn’t it?” said Polyana da Costa, senior mortgage analyst with Bankrate.com.

“The takeaway is, it is very important to shop around for at least three different estimates,” she added. “In some cases you can negotiate.”

In doing its analysis, Bankrate looked at fees charged by lenders, as well as third-party fees for services such as appraisals and title insurance. All of those things cost more in New York, Bankrate said.

The news wasn’t all bad. Closing costs fell 12% in New York as banks competed to snare business.

Melissa Cohn, president of Manhattan Mortgage Co., noted that New York homebuyers are also saddled with a mortgage recording tax. In New York City, that amounts to about 2% of the loan amount, she said.

New York State also requires that banks use attorneys when closing on a loan. That raises your closing costs, too.

But Cohn cautioned homeowners about getting too focused on closing costs.

“Closing costs vary from state to state, but don’t vary so much within the state,” she said. “You should be careful. Some banks advertise no closing costs, or limited closing costs. But they basically bake those costs into the rate.

“You should shop around and negotiate your costs as much as you can,” Cohn added. “But the most important thing is the mortgage: the rate and the terms.”

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Source: The Daily News

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