Where Closing Costs Are the Highest, Lowest

July 20, 2011

Closing costs on mortgages have increased dramatically nationwide, increasing on average 8.8 percent from one year ago, according to a new survey from Bankrate. Origination, title, and third-party fees on a $200,000 loan, for example, averaged $4,070 — that’s up from $3,741 from Bankrate survey in June 2010.

Why the increase? Analysts say it’s because lenders have to do extra work in approving mortgage applications due to increased scrutiny and tighter lending regulations.

The survey found that it can pay off for borrowers to shop around for a mortgage. In New York, for example, lender origination fees were found to vary anywhere from $700 to more than $4,000.

Most-Expensive States for Closing Costs

1.   New York: $6,183

2.   Texas: $4,944

3.   Utah: $4,906

4.   California/San Francisco: $4,832

5.   Idaho: $4,643

Least-Expensive States for Closing Costs

1.   Arkansas: $3,378

2.   North Carolina: $3,410

3.   Indiana: $3,430

4.   Iowa: $3,474

5.   Alabama: $3,501

Source: “Demand Down, But Closing Costs Up,” NASDAQ (July 18, 2011)