Home Buying in Brooklyn>Question Details

Troy, Home Buyer in Brooklyn, NY

Closing cost ? Is it 6% of the purchase price or 6% of the mortgage?

Asked by Troy, Brooklyn, NY Tue Jul 6, 2010

Closing cost? Is it 6% of the purchase price or 6% of the mortgage?

Help the community by answering this question:


You need to speak to a lender. The closing costs will depend on the amount of the mortgage, downpayment and mortgage program you qualify for. You will be given a GFE (good faith estimate) that will allow you to see what it costs for each item. Remember most items are set by NYS or custom.
0 votes Thank Flag Link Thu Jul 22, 2010
Closing cost can range between 4% to 6 and more. Depending on the buyers qualifications and the mortgage product. There are many variables but the average is around 5%. For some more information follow the link below.
0 votes Thank Flag Link Wed Jul 7, 2010
Dear Troy:

Here in New York City as a general rule of thumb the closing costs for the buyer are about 5% of the mortgage amount on the average but can be a) lower if the buyer is supremely qualified or b) higher due to extenuating circumstances such as non-conventional/traditional funding (if you have only self employed and/or non verifiable income for example).

Some closing costs are based on a percentage of the actual mortgage amount and other are flat fees. As an example, some of the closing costs you incur as a buyer would be a) mortgage tax (1.8%), b) appraisal ($450.00 on a one family house), c) bank attorney fee ($750.00), etc., etc.

Also, if you go less than 20% down and take an FHA mortgage you would have to pay upfront PMI (talk to your mortgage banker about this) which would be 2.25% of the loan amount. You may also have to pay points to buy down the mortgage rate. If you purchase a new construction, it is customary that the buyer also pay the seller's transfer taxes (up to 1.825%) and some other incidentals. Also, if you spend over $1,000,000 on your home purchase you would have to pay a mansion tax of 1% of the purchase price.

If I can be of further assistance please let me know. Good luck!

Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665
Cellular: (917) 805-0783
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Wed Jul 7, 2010
It depends what type of property you are buying and for how much. Mortgage tax will vary from 1.8% of the loan amount for a purchase of less than $500,000 to 1.925% for a purchase over $500K. Typically in five boroughs it will be 5-6% of the loan amount for resale transaction and around 7-7.5% for new construction since there is transfer tax involved (1-1.425% of the purchase price). Ask your mortgage broker to provide you with Good Faith Estimate, due to new regulations it should represent an actual closing amount, and verify it with your attorney.
0 votes Thank Flag Link Wed Jul 7, 2010
It's hard to figure out what your question really is. Are you referring to how much the seller's concession can be? If you are talking about what to expect your closing costs to be, that would depend on the size of your loan compared to purchase price. If you have a relatively small loan, because your mortgage tax is a big part of closing costs, the percentage of purchase price would be less. With a 3.5% down loan, your closing costs would be a high percentage because mortgage tax is 1.8% of your loan amount up to $500,000, a little more for over that.
0 votes Thank Flag Link Tue Jul 6, 2010
Hi, if you are buing new construction you will pay transfer tax and it is percentage of purchase price, if you get mortgage you pay mortgage recording tax and it is percentage of mortgage amount.
If you are buying resale you dont pay transfer tax and the bigest part of the closing cost will be mortgage recording tax.
Talk to your attorney and mortgage broker .
0 votes Thank Flag Link Tue Jul 6, 2010
Closing costs will be based on the purchase price--your loan officer can give you better estimates as they apply to your specific situation.
0 votes Thank Flag Link Tue Jul 6, 2010
Hi Troy
the purchase price
0 votes Thank Flag Link Tue Jul 6, 2010
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