Closing costs approach 2%

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Closing costs on a home transaction are approaching 2 percent of the mortgage amount, averaging $3,741 on a $200,000 purchase loan, according to an annual survey by That's a 37 percent increase from a year ago, as lender fees and charges by third parties like title insurers both posted double-digit gains.The survey probably overstated how much closing costs have increased, acknowledged, because it's based on the good faith estimates that lenders provide to borrowers.In the past, borrowers often paid higher fees than those they were quoted in the good faith estimate, and so the survey probably underestimated actual closing costs.This year, the Department of Housing and Urban Development, under the authority of the Real Estate Settlement Procedures Act (RESPA), has imposed limits on which fees can change from the amount quoted on the good faith estimate, and by how much.That means this year's survey probably provides a more accurate picture of actual closing co...