PURCHASER'S CLOSING COSTS - PART ONE

PURCHASER'S CLOSING COSTS - PART ONE

THE DOWN PAYMENT

The first thing to remember is that you also have to pay a down payment, which is in addition to your closing costs. The down payment is figured out by the following formula:

Down Payment = Purchase Price Less Mortgage Principal

Typically, a buyer will need to pay at least ten percent down and thus have to come up with ten percent of the sales price. However, in the current mortgage market where it can be very difficult to obtain ninety percent financing unless you also have good credit, show enough income in your tax return and have sufficient funds in the bank. For this reason, a Seller will typically be more willing to accept an offer, even if it is lower, from someone that is putting down twenty (20%) percent as it is much easier to obtain eighty (80%) percent financing.

GENERAL CONSIDERATIONS

(The following discussion applies for 1-4 family homes in the five boroughs of NYC)

There are two general components to a Purchaser’s closing costs, which are 1) Title Charges and 2 )Bank Closing Costs.

As a prelude to discussing closing costs, certain other charges should be kept in mind which the purchaser will pay outside of closing and are as follows: 1) An engineering inspection ($300 to $500), which should be conducted before the contract of sale is executed; 2) Attorney’s Fee ($850.00 to $1,500.00) 3) Hazard/Fire Insurance ($700 to $1,500) and 4) Termite Inspection ($75 to $125).

Should you have any questions, do not hesitate to contact us at (718) 803-4113 or by email at SKAFAX@YAHOO.COM.

SUNIL K. AGARWAL, ESQ.

NATASHA S. AGARWAL, ESQ.

Please note that your actual closing costs may vary
depending on the nature of the transaction
and the terms of the contract of sale