Closing costs can really add up. Their total can prove to be an unwelcome surprise at the closing table or only days before settlement.
In New York, the extra costs of buying a condo, as opposed to co-op, are substantial. That’s because a co-op is only the purchase of shares of stock in an apartment building, while condo buyers purchase actual real estate and receive a deed.
Here’s your chance to catch up with news included to inform, enlighten and perhaps even entertain you. To read about The Big Apple, check out the other of today’s posts and look for Out and About early next week.
The new Good Faith Estimate (GFE) went into effect at the beginning of the year.
Its aim is to protect the consumer against hidden fees and enable borrowers without advanced degrees in accounting or law to compare apples and oranges. Previously, GFEs had a way of departing from reality at the closing table.
As mortgage broker Bruce Maasbach and others have written, from which I am shamelessly quoting without little additional attribution, the new GFE rules require lenders to disclose and estimate all the closing costs outside of their own fees accurately.
The clincher is this: The lender must guarantee that the costs will not vary by more than 10 percent of the actual cost at the time of the closing. If so, the lender ends up paying them. Continue reading →