the administrative cost of processing and approving the loan. Cost: $300 to $500. • Wire Transfer Fee. Your lender will wire your loan to its attorney who will bring the loan proceeds to the closing in the form of bank checks. Cost: $15 to $30. • Prepaid Interest. At the closing, you will be obligated to pay interest on the loan accruing from the closing date until the last day of the month in which the closing occurs. This is not an additional expense, only a prepayment of interest for the first month of the loan. • Appraisal Fee. If your application or loan processing fee does not include the cost of an appraisal, the fee will be collected at the closing. Cost: $750 to $1,000 depending on the purchase price of the property. Mortgage Insurance. If you obtain a loan equal to more than eighty (80%) percent of the purchase price of your home, your lender may charge you a private mortgage insurance (PMI) premium payable monthly. The coverage does not protect you; it protects the lender if you default on the loan. • Real Estate Taxes. At closing, your lender may require that you deposit into an escrow account an amount sufficient to cover the next installment of real estate taxes. Each month thereafter, you will be required to make a payment equal to one-twelfth of the annual real estate taxes so that your lender will have enough money on hand to make all subsequent tax payments on your behalf when they become due. If the next payment of real estate taxes is due within 60 days of the closing, your lender will require that you pay these taxes at closing. For condos and houses, real estate taxes are generally paid quarterly or semiannually. Additional Closing Costs - Applicable to Condos and Home Purchases Only As discussed in Chapter 10, title insurance is purchased at closing with a one-time premium. The rate is regulated by the Superintendent of Insurance for the State of New York, so all title companies charge the same fee. For illustration purposes,
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