Important factors to consider when writing title insurance across states are the closing and recording fees that you may encounter, specifically:
-
Deed tax
-
Transfer Tax
-
Mortgage Recording Tax
These costs and fees can vary significantly among states. There are states in which you might pay all three, and others that only charge deed tax. So if you’re trying to estimate closing costs it’s important to ask these questions up front so you know what to anticipate.
Recording Fees in Different States
In some states the recording fees can be quite onerous. For example, if you’re recording a mortgage in New York City a brand new mortgage is going to cost just shy of 2% of the loan amount, which can represent a significant additional cost when dealing with commercial property. A common practice there is to modify the mortgage. So you’ll see a mortgage that was originally created 50-70 years ago and it’s been modified time and time again, passed from lender to lender, and borrower to borrower on down the line because they’re trying to minimize expenses.
Understanding the Fees Associated with Your Transaction
If you’re a property investor or if you’re representing a commercial real estate client, it’s important to understand what those fees are going to look like beforehand because they can significantly increase the cost of a transaction.