Loan Estimate Challenges
New York’s Biggest LE Challenges

Many users of LodeStar’s closing cost calculator use it in most or all of the states they do business. However, it’s telling to note that, of all of our single-state users—title companies that prefer to do their LEs and closing cost estimates by hand—the vast majority use it for the state of New York.

That’s with good reason. Of all the 50 states, perhaps none have the variety and multitude of unique taxes and fees that New York offers. Statewide, New York boasts a 1 percent “mansion tax” for properties of specified size and meeting certain requirements. New York is also the only state in the nation with a lender-paid tax (¼ of a point). Most loan origination systems are not designed with this in mind, which can be a bit of a hassle.

The New York CEMA

Then there’s CEMA (Consolidation, Extension and Modification Agreement) tax, something else unique to New York. The CEMA is a type of refinancing transaction designed specifically to facilitate a refinancing without the expensive mortgage recording tax. In essence, the refinancing party is given “credit” for any existing debt on the mortgage being refinanced. However, in New York, where the homeowner refinances within a specified period of time, he or she may need to pay an extra CEMA and recording fee to the bank. (Note that LodeStar offers a CEMA calculator for those uncertain whether a CEMA would be right for them. You can see a demo here.) (LINK)

Recording Fees in New York

Recording fees can also be a bit tricky throughout New York—especially on Long Island, where they can reach $700 and up (in most states, recording fees tend to fall between $100 – $200). They can also vary from town to town.

Hudson Valley and County-Specific taxes

In Hudson Valley and some other “upstate” regions, there exist some unique, county-specific taxes, which can vary. In some cases, towns or cities within the same county have been known to impose their own taxes, which can be a bit higher than the norm. 

Long Island

In Suffolk County, on Long Island, there exists a peculiar tax known as the “Peconic Bay Tax,” which is imposed to enable townships along the Peconic Bay to purchase and preserve certain properties to protect the integrity of the area. Unfortunately, in Suffolk County, the names of the various townships and hamlets in and of themselves often cause confusion. In some cases, an extra 1% is lumped directly into the deed tax. For loan officers or assistants unfamiliar with the Long Island region, the tens of thousands of dollars of differences from one town to the next can easily appear to be a mistake when, in fact, the number is accurate.

The Big Apple

And then there’s America’s largest city…

Throughout the five boroughs, there are quite a few different taxes and fees as well as a number which are tiered. For example, deed taxes there tend to go up as the purchase price increases.

The five boroughs also impose significant “per block” fees and “per lot” fees, which can cost hundreds of dollars. That’s not to mention the unique situation imposed by co-ops, which can be protected from multiple taxes. (Don’t worry. The LodeStar calculator does handle co-ops.). It should also be noted that, in the city and five boroughs, the buyer can pay a seller’s tax, but the fee estimate must be rerun adding that tax back into the purchase price.

Confused? Of course, the easiest way to handle New York’s complex taxation nuances is by using a reliable closing cost calculator like LodeStar’s. You can see a quick demo here if you’re still not sure.



Interested in diving deeper in LodeStar’s closing cost expertise?

BOOK A DEMO of our Closing Cost Calculator to see how we can help you disclose safely and accurately, no matter where you’re lending.