Arnold R. Streisfeld, P.C.

"POINTS" (ORIGINATION FEE) - Percentage of monies borrowed from any institutional lender.  In conventional lending, such amounts are paid by the purchasers and are usually motivated by a commensurate reduction in the mortgage interest rate.  In FHA and/or VA transactions, these points may be paid by regulation either by the purchaser or by the seller.  When points are paid by the seller, in negotiating the purchase, they are built into the purchase price so that seller is not actually paying them.  Pricing of loans may result in higher points paid to yield a lower interest rate on the actual loan.

APPRAISAL FEE - This fee is often paid up front, at application (or most of it), prior to closing (Est. $325-$500). It is for the purpose of having an inspection made of the home to determine its value for mortgaging purposes.  New construction will require an additional "final inspection fee" to assure proper completion of the home before bank originates the loan.

CREDIT REPORT - Also often paid at the time of the application for purposes of evaluating what loan programs the borrower(s) are eligible for (Est. $15-$30).

HOME INSPECTION, WATER TEST, TERMITE INSPECTION AND RADON TEST - Generally handled, in terms of how and when they are paid, as the appraisal fee, that is, at time of service.  Paid directly to home inspection company and/or laboratory doing the test(s).

PER DIEM INTEREST - This amount represents interest payable from the day of closing in a given month to the last day of the month in which you close.  It is computed by multiplying the interest rate of the loan at time of its origination, times the principal amount borrowed and divided by 360 or 365 days a year, depending on the particular lending institution.  Sometimes it is billed at the closing and sometimes (but rarely) it is paid the first day of the month immediately following the closing of title.  The first monthly mortgage payment will be the first day of the second month following the closing.

TAX ESCROWS - Monies deposited with the bank for taxes that will become due in the future.  When 1/12 of the yearly taxes paid each month until the taxes are due are added to these up-front payments made at closing, the taxes can be paid by the lender when they become due.  Generally, lenders and loan officers will estimate the number of month's taxes to be deposited in the escrow accounts.  Ask your attorney to project what the actual deposits will be when you first meet with them.

MORTGAGE AND PURCHASERS' (FEE) TITLE INSURANCE - Every lending institution requires that you insure, for title purposes, the full dolllar amount of the loan given to you.  It is not mandatory that the owner insure his own equity interest in the title (but it is extremely advisable).  There is a break known as the "simultaneous rate" given to the purchasers for insuring their equity in the home once the mortgage is insured as required.  Also, the title companies now have to offer all residential purchasers a "Fair Market Value Rider" to the title policy which would increase their coverage as the value of the house increases during the time of ownership.  This costs roughly an additional 10% premium and also is paid once only, like the other premiums.

RECORDING FEES - The fees are $28.00 per document and then an additional $3.00 per page in the document.  There also exists an "Equalization and Assessment" form filed with the deed which is a $25.00 recording fee.  Estimate roughly $300.00-450.00 for recording a deed and mortgage in a purchase transaction.   NOTE: This includes processing fees which many title companies add to the service of recording.

MUNICIPAL SEARCHES - This search is done by the title company and looks for municipal violations on the premises which are filed.  Cost is approximately $350-$550.00.

PROCESSING FEE B Charged by a number of lenders.  It is essentially a fee for the review of a loan by the processor or underwriter in the lender's originations office (Est. $750-1,000).

NEW YORK STATE MORTGAGE RECORDING TAX - This item is a tax levied on the amount of monies loaned to the purchaser at the closing.  The purchasers' portion of the mortgage tax is as follows:

     Yonkers B 1.55% of mortgage amount minus $30 if a one- or two- family residence

     Remainder of Westchester and Rockland B 1.30% of mortgage amount minus $30 if a one- or two- family residence.

     New York City:

1.  If less than $499,999.99 - 1.80% of mortgage amount less $30 for a one- or two- family residence.

2.  If $500,000.00 or more B 1.925% minus $30 if a one- or two- family residence.

MANSION TAX B Paid by the Purchaser(s) when the purchase price is $1,000,000 or more.  It is 1% of the ENTIRE sales price once the $1,000,000 threshold is met.  There is no exclusion for the first $1,000,000.

FIRE (HAZARD) INSURANCE - Variable according to the value and improvements of the home.  It is required (if not sensible) when a mortgage is being placed on a home and bank must be endorsed as first loss-payee.  First year premium must be paid and lender will escrow usually 2-3 month's of following year's premium.

SURVEY CHARGES - Finding out if seller has existing survey of the property that can be used to update by inspection will cost, usually $95.00-$195.00.  New survey (needed if major structural additions or changes) will cost $850.00-$1,500.00 on the average.

LENDER'S ATTORNEY'S FEES - This item is often quite variable depending on who you are borrowing from.  Some institutions charge as little as $600.00 on a closing.  Other institutions' attorneys may charge up to $ 1,500.00 on a residential home closing fee.  Check this with the particular lender to be applied to in their Preliminary Closing Disclosure.

PURCHASERS' OR SELLERS' ATTORNEY'S FEES - This item is also quite variable.  Some purchasers' attorneys will charge a flat legal fee per closing.  Others may charge a percentage of the purchase price in a given instance. KEY:  Check for the experience of the attorney in real estate and in the locality that they practice and the extent of services to be rendered (i.e. staff support, who will handle, etc.).  Ask what it DOESN'T cover.

New York City:

60 East 42nd Street

(One Grand Central Place)

Suite 4600

New York, New York 10165

(212)557--0400

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