AFTER the down payment: closing costs to consider

For first-time homebuyers the sticker shock of closing costs can be a lot to absorb. After coming up with a significant down payment, moving costs and other incidentals tied to going from city to suburban life, many new buyers find themselves confronted with another set of hefty fees which, in some cases, can be 30-50% of that initial investment. 

So what’s in a down payment—and how can you prepare for those inevitable fees come closing?

Total bank fees vary based on the size and type of mortgage you choose, but typically include application fee, lender closing fees, settlement/closing fees, title examination, title insurance and document preparation fees.

Third-party fees are for services rendered by parties other than the borrower or the lender, such as appraisal, credit report, title, state-specific taxes and deed fees, closing-escrow fees, and flood certifications.

Prepaid interest & insurance are funds equal to the interest that accrues on your loan from your closing date until the last day of the month, plus the initial premium for your homeowners insurance policy. This will vary based on which day of the month you close.

Escrow account funds include monies collected by the lender from the borrower in order to pay the property taxes and homeowners insurance premiums when they become due.

Here’s what to expect on an $800,000 loan.

NEW YORK (Long Island)

Total bank fees: $3,522

Third-party fees: $24,152

Prepaid interest & insurance: $5,246

Escrow account funds: $1,096

TOTAL: $34,016

NEW YORK (Westchester)

Total bank fees: $3,522

Third-party fees: $25,902

Prepaid interest & insurance: $4,946

Escrow account funds: $4,664

TOTAL: $39,034

NEW JERSEY

Total bank fees: $8,961

Third-party fees: $6,558

Prepaid interest & insurance: $4,996

Escrow account funds: $5,086

TOTAL: $25,601

CONNECTICUT

Total bank fees: $8,379

Third-party fees: $5,118

Prepaid interest & insurance: $4,276

Escrow account funds: $1,114

TOTAL: $18,887

PLEASE NOTE: Estimates based on purchases in Port Washington, Scarsdale, Montclair and Greenwich, with a 30-year fixed rate mortgage.