The $2M offer got accepted. Then came the settlement statement: $27,500 in lender fees, title insurance, escrow costs, and recording charges. Plus $20,000 Empire Pass transfer fee. Plus $12,000 prorated HOA dues and property taxes. That's $59,500 beyond the purchase price; nearly 3% more than anticipated.
Park City buyers budget for down payments while underestimating closing costs that routinely add $30,000-$80,000 to luxury property purchases. Utah's structure differs from high-tax states; no state transfer tax saves money, but Park City's resort community fees, luxury HOA transfer charges, and capital contribution requirements create unexpected expenses that standard closing cost calculators miss.
Understanding Utah-specific closing cost allocation, Park City HOA transfer fees ranging from $100 to $50,000+, capital contribution requirements in luxury developments, and cash versus financed purchase differences helps buyers budget accurately and negotiate strategically rather than scrambling for additional funds days before closing.
Utah Closing Cost Basics: Who Pays What
Utah follows different conventions than California, New York, or Florida; understanding local customs prevents surprises.
No state transfer tax:
Utah eliminated transfer taxes; major savings compared to states charging 1-2% of purchase price. $2M California purchase might incur $20,000-$40,000 transfer tax. Utah: $0 state transfer tax. County recording fees of $33-$50 replace transfer taxes; minimal by comparison.
Buyer responsibilities (2-5% of purchase price):
Loan origination fees: 0.5-1% of loan amount ($5,000-$10,000 on $1M loan). Appraisal: $500-$800 for standard properties, $1,000-$2,000 for luxury properties requiring specialized appraisers. Credit report: $30-$50 per applicant. Lender's title insurance: 0.5-0.7% of loan amount ($5,000-$7,000 on $1M loan). Home inspection: $400-$700 for standard properties, $800-$1,500 for large luxury homes. Survey (if required): $400-$1,000. Escrow/closing fees: $500-$1,500 (often split with seller). Recording fees: $33-$50 for deed recording. Prepaid property taxes: Prorated from closing date to next tax period. Prepaid homeowners insurance: Full year premium at closing ($3,000-$12,000 for Park City properties). HOA transfer fees and capital contributions (Park City specific; see dedicated section).
Seller responsibilities:
Owner's title insurance: 0.5-1% of sale price ($10,000-$20,000 on $2M property); Utah custom has sellers paying though negotiable. Outstanding mortgage payoff: Remaining balance plus any prepayment penalties (up to 2% of balance). Prorated property taxes: Seller's portion through closing date. Outstanding HOA dues: Current through closing plus any special assessments. Escrow/closing fees: $500-$1,500 (often split with buyer). Real estate commissions: 5-6% total (historically, though post-NAR settlement changing dynamics).
The negotiation reality:
All closing costs except government fees are technically negotiable. Competitive markets: Buyers pay standard costs; sellers won't offer concessions when multiple offers exist. Soft markets: Sellers offer $5,000-$15,000 closing cost credits to facilitate sales. Cash offers: Buyers eliminate all lender-related fees, saving $10,000-$20,000+ on luxury purchases.
Luxury Property Closing Costs: The $2M Example
Standard percentages don't capture Park City luxury property closing cost reality; actual line items tell the story. For a broader look at what different price points deliver in Park City, see our guide to Park City Price Tiers: What $1M, $3M, $5M, and $10M Actually Buy You.
Financed purchase: $2M condo, 20% down ($400K), $1.6M loan:
Loan origination fee (0.75%): $12,000. Appraisal: $1,200. Credit report: $50. Lender's title insurance (0.6%): $9,600. Home inspection: $900. Escrow fee: $1,000 (split with seller). Recording fees: $45. Prepaid property taxes (4 months): $6,667 (using 1% second home rate). Prepaid insurance: $8,000. Private mortgage insurance (if under 20% down): N/A. HOA transfer fee (example: 1% Empire Pass): $20,000. Prorated HOA dues (2 months): $3,000. Total buyer closing costs: $62,462 (3.12% of purchase price).
Cash purchase: $2M condo, no financing:
Owner's title insurance (negotiated buyer pays): $18,000. Home inspection: $900. Escrow fee: $1,000. Recording fees: $45. Prepaid property taxes: $6,667. Prepaid insurance: $8,000. HOA transfer fee (1%): $20,000. Prorated HOA dues: $3,000. Total buyer closing costs: $57,612 (2.88% of purchase price).
The financing premium:
Financed buyers pay $4,850 more in closing costs ($12,000 origination + $9,600 lender's title - $16,750 owner's title buyer negotiated out of). However, keeping $1.6M invested at 6% annual returns generates $96,000 year one; financing premium pays for itself in less than one month of investment returns. Math strongly favors financing for buyers with liquid capital, especially in current mortgage rate environment (6.5-7.5% mortgages versus 8-10%+ investment return potential).
Luxury property multipliers:
Properties over $3M require specialized appraisals ($1,500-$2,500). Properties over $5M often require two appraisals for lender confidence ($3,000-$5,000 total). Insurance premiums scale with value; $5M property runs $15,000-$20,000 annually. Title insurance rates on luxury properties hit percentage caps; $5M property doesn't pay 5x the $1M rate (rates decline as brackets increase). Inspection costs for 7,000+ sq ft estates run $1,500-$2,500 given scope.
Park City HOA Transfer Fees: The Hidden Cost
Transfer fees represent Park City's most surprising closing cost; buyers routinely discover them days before closing. For ongoing HOA expenses beyond transfer fees, see our comprehensive guide to Park City's Hidden HOA Costs.
What transfer fees actually are:
One-time charges paid at closing when ownership changes, collected by HOA or Master HOA (MHOA). Go directly to HOA reserve funds for capital improvements, amenity maintenance, infrastructure projects. Required by CC&Rs (Covenants, Conditions & Restrictions) filed with county; legally enforceable. Separate from annual HOA dues; these are one-time ownership transfer charges only.
Park City transfer fee ranges by community:
Empire Pass MHOA: 1% of purchase price ($20,000 on $2M property); goes toward private ski lodges, clubhouses, infrastructure. Individual Empire Pass HOAs may charge additional transfer fees on top of MHOA fee. Deer Crest: 1% of purchase price; exclusive Deer Valley community funding private amenities. The Colony at White Pine Canyon: 0.5-1% typical; ski-in/ski-out community at Canyons Village. Glenwild: 1% of purchase price; golf community transfer fee supports course and amenities. Promontory: 1% of purchase price; championship golf courses (Pete Dye, Jack Nicklaus) and extensive amenities. Victory Ranch/Talisker Club: 0.5% of purchase price; Provo River access, golf, ranch amenities. Red Ledges: 0.5% of purchase price; Heber Valley golf community. Standard condo buildings: $100-$500 flat fee or 0.25-0.5% of purchase price. Single-family HOAs (Pinebrook, Silver Creek, Park Meadows): $100-$300 flat fees typical.
Capital contribution fees (additional to transfer fees):
Some luxury developments require capital contributions separate from transfer fees; buyer contributes to reserve fund at closing. Amounts range from $5,000 to $100,000 depending on community and unit size. Common in newest luxury developments (Deer Valley East Village, new Canyons Village projects). Purpose: Jumpstart reserve funds so existing owners don't bear full burden of future capital projects. Larger units pay proportionally more; 3,000 sq ft penthouse pays more than 1,200 sq ft studio.
Who actually pays transfer fees:
Legally negotiable; CC&Rs don't mandate buyer or seller payment. Standard Park City practice: Buyer pays transfer fees in most transactions. Seller leverage in competitive markets: Buyers accept all transfer fees to secure property. Buyer leverage in soft markets: Negotiate 50/50 split or seller payment. Cash offers: Strong negotiating position for buyer to push transfer fees to seller.
The cumulative impact:
$2M Empire Pass condo with 1% MHOA fee ($20,000) plus 0.5% individual HOA fee ($10,000) = $30,000 in transfer fees alone. $4M Colony property with 1% fee = $40,000. $6M Deer Crest estate with 1% fee = $60,000. These fees add 1-2% to total closing costs beyond standard lender and title expenses.
Why transfer fees exist:
HOAs discovered property sales present opportunity to fund capital reserves without raising monthly dues on existing owners. One-time influx from each sale builds reserves for roofs, parking structures, amenity renovations, infrastructure. Spreads capital costs across all owners over time rather than hitting existing owners with large special assessments. Communities with robust transfer fees often have lower annual HOA dues than comparable communities without transfer fees.
Escrow and Title Insurance Explained
Title and escrow services protect all parties; understanding what you're paying for reduces sticker shock.
Title insurance: Two policies, different beneficiaries:
Lender's title insurance: Protects lender's interest if title problems emerge (liens, ownership disputes, unpaid taxes, errors in public records). Required for all financed purchases. Cost: 0.5-0.7% of loan amount ($8,000-$11,200 on $1.6M loan). Buyer always pays lender's policy; non-negotiable when financing. Owner's title insurance: Protects buyer's ownership interest from same title defects. Not legally required but strongly recommended. Cost: 0.5-1% of purchase price ($10,000-$20,000 on $2M property). Utah custom: Seller typically pays owner's policy, but negotiable; buyers sometimes pay in competitive markets.
What title insurance actually covers:
Forged deeds or signatures. Undisclosed heirs claiming ownership. Recording errors in public records. Liens from previous owners (tax liens, contractor liens, judgment liens). Boundary disputes or survey errors. Fraud in prior transactions. Easements or encumbrances not disclosed. Coverage lasts entire ownership period; one-time premium at closing, protection forever.
Title search process:
Title company searches public records 30-50 years back verifying clear ownership chain. Identifies any liens, judgments, easements, restrictions affecting property. Resolves title issues before closing; liens paid off, ownership clarified, documents corrected. Clean title delivered at closing allowing ownership transfer. Title insurance backstops this process; if title company missed something during search, insurance covers losses.
Escrow services:
Neutral third party (escrow company) holds funds and documents until all closing conditions met. Collects earnest money deposit, down payment, closing costs from buyer. Collects payoff amounts, closing costs from seller. Disburses funds to appropriate parties at closing: seller's proceeds, lender payoff, realtor commissions, HOA fees, government fees. Records deed and mortgage with county. Ensures nobody gets funds or ownership until all contractual obligations satisfied. Cost: $800-$1,500 total, typically split buyer/seller ($400-$750 each).
Combined title and escrow:
Many Park City transactions use single company providing both title and escrow services. Streamlines process; one entity coordinates search, insurance, funds, recording. Pricing sometimes bundled; $1,200-$2,000 total for title and escrow services (excluding insurance premiums).
Prorated Costs: Taxes, HOA Dues, Utilities
Prorations ensure buyers and sellers pay fair share of ongoing expenses; understanding calculations prevents closing day surprises.
Property tax prorations:
Property taxes paid annually or semi-annually. Seller owes taxes through closing date, buyer owes taxes from closing date forward. Example: $20,000 annual taxes, closing July 1 (midyear). Seller owes January 1-June 30 = $10,000. Buyer owes July 1-December 31 = $10,000. If seller already paid full year taxes, buyer credits seller $10,000 at closing. If taxes unpaid, seller pays $10,000 prorated amount at closing. Park City specifics: Primary residence taxed at 0.55%, second homes at 1%. $2M second home = $20,000 annual taxes. Closing mid-year means $10,000 proration adjustment one way or other. For detailed property tax strategies, see our Park City Property Tax Guide.
HOA dues prorations:
HOA dues paid monthly, quarterly, or annually depending on community. Seller owes dues through closing date, buyer owes dues from closing forward. If seller paid current month/quarter in advance, buyer credits seller unused portion. If dues unpaid, seller pays prorated amount through closing date. Example: $1,500 monthly dues, closing September 15. If seller paid September dues ($1,500), buyer owes seller half ($750) for September 16-30. Luxury properties with $3,000-$4,000 monthly HOAs create $1,500-$2,000 prorations at mid-month closings.
Utility prorations:
Water, sewer, trash (if not included in HOA). Electric, gas utilities. Seller pays through closing day, then accounts transferred to buyer. Utility companies do final reads at closing, prorate charges. Usually small amounts ($100-$300) but add to closing costs.
The timing consideration:
Closing early in month (September 1-5) minimizes proration amounts; seller barely into current month. Closing late in month (September 25-30) maximizes prorations; seller paid most of month's dues/utilities, buyer credits substantial amounts. Strategic buyers closing on luxury properties time closings early month to reduce closing day cash needed for prorations.
Cash Purchase Closing Costs
Cash buyers eliminate lender-related fees but don't escape closing costs entirely; budget 1.5-2.5% of purchase price.
What cash buyers skip:
Loan origination fees: Save $10,000-$25,000 on $2M-$5M purchases (0.5-1% of loan amount). Lender's title insurance: Save $8,000-$35,000 on $1.6M-$5M loans (0.5-0.7% of loan). Appraisal: Save $1,000-$2,500 (still recommended for buyer's peace of mind but not required). Credit report: Save $30-$50. Lender-required inspections: Save costs of specialized lender-mandated inspections. Points/discount fees: Save if you would have paid points to reduce rate. Total lender-related savings: $19,000-$63,000 on $2M-$5M purchases.
What cash buyers still pay:
Owner's title insurance: $10,000-$50,000 on $2M-$10M purchases (0.5-1% of price); strongly recommended even without lender requirement. Home inspection: $800-$2,500 depending on property size and complexity. Escrow fees: $400-$1,000 (buyer's half). Recording fees: $33-$50. Prepaid property taxes: $5,000-$50,000 depending on property value and time of year (prorated). Prepaid insurance: $5,000-$25,000 depending on property value and coverage. HOA transfer fees: $100-$60,000+ depending on community (1% of $6M = $60,000). Prorated HOA dues: $500-$4,000 depending on closing date and monthly dues. Total cash buyer closing costs: $21,000-$140,000+ on $2M-$10M range.
The all-in cash transaction:
$2M condo, cash purchase, Empire Pass (1% transfer fee), mid-month closing: Owner's title insurance: $18,000. Inspection: $900. Escrow: $750. Recording: $45. Prepaid taxes (4 months to year-end): $6,667. Prepaid insurance: $8,000. HOA transfer fee: $20,000. Prorated HOA dues (2 weeks): $750. Total: $55,112 (2.76% of purchase price).
Compare to financed purchase needing $400K down + $62,462 closing = $462,462 total cash to close. Cash purchase needs $2M + $55,112 = $2,055,112 total. Difference: $1,592,649 more for cash purchase. If that $1.6M invested at 6% annually generates $95,759 year one, financing premium ($7,350 extra closing costs for financed purchase) pays for itself in less than one month.
When cash purchases make sense:
Avoiding financing contingencies in competitive multiple offer situations. Buying properties that don't qualify for financing (condition issues, unique construction, warrantability problems). Buyers uncomfortable with debt regardless of favorable leverage mathematics. Properties under $1M where financing costs proportionally higher and investment opportunity cost lower. Quick closings (7-14 days possible with cash, 30-45 typical with financing).
Jumbo Loan Considerations
Park City luxury properties typically require jumbo loans; understanding requirements and costs prevents qualification surprises.
Jumbo loan definition:
Exceeds conforming loan limits set by FHFA (Federal Housing Finance Agency). 2025 conforming limit: $806,500 for single-family homes in most counties. Park City's Summit County: $806,500 conforming limit (not high-cost designation). Any loan over $806,500 = jumbo loan with different requirements and pricing.
Jumbo loan requirements (stricter than conforming):
Higher credit scores: 700+ minimum, 740+ for best rates (conforming accepts 620+). Lower debt-to-income ratios: 43% maximum, 38% preferred (conforming allows up to 50%). Larger down payments: 20% minimum, 25-30% for second homes (conforming accepts 3-5% down primary, 10% second). Cash reserves: 12-24 months PITI (principal, interest, taxes, insurance) required in liquid reserves after closing. More documentation: Tax returns, bank statements, asset verification, employment verification all scrutinized heavily. Higher rates: Jumbo rates run 0.25-0.75% higher than conforming rates (though gap narrowing in current market).
Second home vs investment property designation:
Second home financing: Lower rates (0.5% less than investment), lower down payment (20% vs 25%), easier qualification. Requires: Must be 50+ miles from primary residence, buyer occupies property personally, limited rental use (owner-occupied majority of time). Investment property financing: Higher rates, higher down payment, rental income can offset qualification but lender haircuts amount (typically 75% of projected rent counted). Allows: Unlimited rental use, property management, commercial approach to ownership.
Park City lenders understand luxury market:
Local/regional lenders often more flexible than national banks on Park City luxury properties. Understand seasonal rental income models, HOA structures, resort property valuations. May accept higher DTI ratios when compensating factors exist (large reserves, substantial assets, multiple properties). Relationship banking matters; existing clients get better terms than new applicants. Portfolio lending: Some local lenders keep loans in-house rather than selling to secondary market, allowing more flexibility on terms.
Jumbo financing costs on $2M purchase:
20% down = $400K, $1.6M loan. Loan origination (0.75%): $12,000. Lender's title insurance: $9,600. Appraisal: $1,200. Total lender costs: $22,800. Monthly payment at 7% for 30 years: $10,642/month = $127,704 annually. First year interest: ~$111,000 (tax deductible up to $750K loan limit = $58,125 deductible, saves $17,438 at 30% tax bracket).
Negotiating Closing Costs
Closing costs are negotiable; understanding leverage points helps buyers reduce expenses or sellers attract buyers.
Seller concessions (buyer requests):
Soft markets allow negotiating seller-paid closing cost credits ($5,000-$30,000 depending on market conditions). Structure as credit at closing reducing buyer's cash requirement. Lenders limit seller concessions: 3% for investment properties, 6% for second homes with 10-25% down, 9% for primary with less than 10% down. HOA transfer fees: Request seller payment or 50/50 split; $10,000-$30,000 savings on luxury properties. Price reductions vs closing credits: Sometimes better to negotiate lower purchase price rather than closing credits; reduces loan amount, property taxes, future selling costs.
Lender fee negotiation:
Shop multiple lenders comparing Loan Estimates (standardized federal form). Origination fees most negotiable; 0.5% to 1.0% variance common. Points vs rate trade-offs: Consider buying down rate if planning long-term ownership. Lender credits: Some lenders offer credits covering closing costs in exchange for slightly higher rate.
Final Settlement Statement Review
Final settlement statement arrives 3-5 days before closing; reviewing carefully prevents last-minute scrambles.
Closing Disclosure (CD) replaces old HUD-1:
Lenders must provide CD three business days before closing (federal requirement). Details every cost, every credit, every adjustment, final numbers. Two pages: Costs breakdown and transactions summary. Review immediately when received; errors correctable if caught early, painful if discovered at closing table.
What to verify on CD:
Purchase price matches contract: Sounds obvious but errors happen. Loan amount correct: Verify matches your down payment calculation. Interest rate and monthly payment match lender's quote: Lock confirmation vs actual CD numbers. Lender fees match Loan Estimate provided at application: Federal law limits lender fee increases (max 10% variance). Title and escrow fees reasonable: Compare to estimates from title company. Property taxes calculated correctly: Primary residence 0.55% vs second home 1% makes huge difference. HOA transfer fees match HOA documentation: Verify percentage and calculation base (some HOAs calculate on assessed value vs purchase price). Prorations calculated correctly: Count days seller owes vs buyer owes. Credits applied: Earnest money deposit, seller concessions, any repair credits all reflected.
Wire transfer preparation:
Final number shown as "Cash to Close" or "From Borrower" on CD. Verify amount, then contact escrow company for wiring instructions. NEVER accept wiring instructions via email; sophisticated scams redirect funds. Call escrow company directly using phone number from business card or website, verify routing and account numbers verbally. Wire funds 1-2 days before closing ensuring time for any issues. Confirm escrow company received wire before closing day.
The cash requirements:
$2M condo example from earlier: $400K down payment + $62,462 closing costs = $462,462 total. Earnest money deposit (typically $20,000-$50,000) already paid, credited at closing. Final wire: $462,462 - $30,000 earnest money = $432,462 wire required. Ultra-luxury properties: $5M purchase with 20% down ($1M) + $120,000 closing costs - $100,000 earnest = $1,020,000 final wire. Plan liquidity accordingly; moving this much money between accounts takes time, bank holds possible, coordination required.
For a comprehensive breakdown of ongoing ownership costs beyond closing, see The Real Cost of Owning a Home in Park City Beyond Your Mortgage Payment.
See the Newest Park City, Utah Real Estate Listings
Important Disclosure
The figures, fees, tax rates, and other financial information presented in this article are estimates based on current market conditions and are provided for illustrative purposes only. Closing costs, HOA fees, transfer fees, and other expenses vary significantly based on specific properties, lender requirements, HOA structures, and individual circumstances.
Do not rely on these numbers as exact figures for your transaction. Always verify current costs and requirements directly with:
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Your lender for all loan-related fees and requirements
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Title companies for title insurance and escrow costs
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HOA management companies for transfer fees, capital contributions, and dues
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Your tax professional for property tax calculations and deductibility questions
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Your real estate attorney for legal matters and contract review
Every transaction is unique. The examples provided illustrate general principles but should never substitute for personalized professional guidance tailored to your specific purchase.
Frequently Asked Questions
How much should I budget for closing costs on a $2M Park City condo?
Budget 3-4% of purchase price for financed purchases ($60,000-$80,000) and 2-3% for cash purchases ($40,000-$60,000). Luxury resort communities with 1% HOA transfer fees add $20,000 on top of standard costs. Always request Loan Estimate from lender and closing cost estimate from title company within first week of contract to avoid surprises.
Are Park City HOA transfer fees negotiable?
Legally yes, practically difficult. Standard practice has buyers paying transfer fees. In soft markets with properties sitting 60+ days you can negotiate 50/50 splits or seller payment. In competitive multiple offer situations forget negotiating; buyer pays all fees. New construction developers typically require buyer payment in purchase contracts (non-negotiable).
Can I shop for title insurance and escrow services in Utah?
Yes. Utah allows title insurance shopping; rates are regulated but companies offer different service packages and fees. Get quotes from 2-3 companies comparing total costs including title insurance premiums, escrow fees, and closing services. Potential savings of $500-$2,000 on $2M transactions. Your realtor can recommend reputable local companies.
Do cash buyers pay closing costs in Park City?
Yes, substantial costs. Cash buyers save $19,000-$63,000 in lender-related fees on $2M-$5M purchases but still pay title insurance ($10,000-$50,000), HOA transfer fees ($100-$60,000), inspections, insurance, taxes, and recording fees. Budget 1.5-2.5% of purchase price for closing costs even when paying cash.
What's the difference between lender's and owner's title insurance?
Lender's title insurance protects lender's interest (buyer always pays when financing, 0.5-0.7% of loan amount). Owner's title insurance protects buyer's ownership interest (seller typically pays in Utah, 0.5-1% of purchase price). Both protect against title defects but benefit different parties. Buying cash? Owner's policy strongly recommended even though optional.
How do Empire Pass transfer fees work if there's a Master HOA and individual HOA?
Empire Pass has Master HOA (MHOA) charging 1% of purchase price plus individual condo HOAs potentially charging additional 0.25-0.5%. A $2M purchase might incur $20,000 MHOA fee + $5,000-$10,000 individual HOA fee = $25,000-$30,000 total transfer fees. Review HOA documents during due diligence identifying all applicable transfer fees; multiple HOAs mean multiple fees.
When do I receive final closing cost numbers?
Closing Disclosure (CD) arrives 3-5 business days before closing. Federal law requires this timing for financed purchases. Review immediately checking purchase price, loan amount, rate, fees, HOA charges, prorations, and credits. Contact lender or escrow company about any errors or questions; fixing issues easier before closing day than after.
Can sellers pay buyer's closing costs in Park City?
Negotiable based on market conditions. Competitive markets: Sellers rarely offer concessions. Balanced markets: Sellers consider $5,000-$15,000 credits. Soft markets: Sellers may offer $15,000-$30,000+ credits or pay HOA transfer fees. Structure as seller credit at closing reducing seller proceeds and buyer's required cash to close. Lenders limit seller concessions to 3-9% depending on loan type and down payment.
Are closing costs tax deductible for Park City properties?
Partially. Mortgage interest deductible (up to $750,000 loan limit for combined first and second homes). Property taxes deductible (up to $10,000 combined state/local/property taxes annual cap). Loan origination fees amortized over loan life. Title insurance, escrow fees, HOA transfer fees, inspections not deductible. Consult CPA for specific tax situation; rules differ for investment properties versus second homes.
Should I use local Park City lenders or national banks for luxury property financing?
Local/regional lenders often better for Park City luxury properties. They understand resort property valuations, seasonal rental income, HOA structures, and market nuances. May offer more flexibility on debt-to-income ratios when compensating factors exist. Shop both local and national comparing rates, fees, and underwriting flexibility. Rate differences of 0.25-0.5% common but service and understanding matter for smooth closings.
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