Mortgage Rates Near Historic Lows

BUFFALO, NY – As mortgage rates continue to hover at or near historic lows, many who haven’t done so already continue to contemplate refinancing their existing mortgages.

But the bounty of savings you may reap will likely be lower than in other states if you live in New York State due to higher closing costs.

“There are certain fees here that might not be charged to a consumer in other states,” said Brian Downing, a Mortgage Loan Officer at L.W. Integrity Funding LLC in Williamsville.

Such fees could add thousands of dollars to the cost of re-financing for a homeowner in New York.

“We have a stamp tax that is .075% of the loan size,” noted Downing.

On a $200,000 loan that equates to $1,500.

In its annual closing cost survey concludes New York ranks as the most expensive state in which to obtain or re-finance a mortgage, where the average closing costs of $5,623 are about 50% higher than the national average.

During his visit to Buffalo on Tuesday, 2 On Your Side asked NY Governor-Elect Andrew Cuomo if he could do anything about this.

“If you asked me my number one target in terms of taxes, it would be the property tax before the mortgage tax frankly,” Cuomo replied.

Reducing property taxes, though, might actually help lower closing costs because a lender will typically require a portion of future property taxes be placed into an escrow account as part of the closing costs.

Presumably the lower the taxes, the lower the escrow, and thus the lower the amount due at closing.

While NY ranks highest in closing costs, it’s also true those costs are rising across the country. New regulations put in place after the sub-prime mortgage crisis, now require lenders to take far more stringent steps to make sure mortgage applicants are bankable. Lending institutions say all that additional work is costing them -and consequently the borrower– more to close a loan.

Despite New York’s higher costs, Downing says re-financing may still be well worth your while. But he also feels you might have to act fast.

“These low interest rates we’ve had for the last year and a half are going to start to creep up a little bit,” he predicted.

Click on the video icon to watch the story from 2 On Your Side Reporter Dave McKinley and Photojournalist Scott May.