One of the most commonly neglected cost considerations is at the closing table. Mortgage closing costs can vary greatly state-to-state, accoridng to data from Bankrate.com, which can have a big impact on the reality of affordable homes for some buyers.
Not considering title search, taxes, escrow fees, discount points and taxes, the financial firm measured each state in June 2016 for mortgage closing costs, which include fees charged by lenders, appraisal fees and costs of credit reports. The top 10 lenders in each state were surveyed.
The national average total closing cost was $2,128 on a $200,000 mortgage loan for the purchase of a single-family home with a 20 percent down payment, Bankrate says. Accoridng to Zillow, homebuyers should expect to pay between 2 to 5 percent of home purchase price in total closing fees.
“Thanks to the new and improved mortgage disclosures that the CFPB introduced last October, closing cost estimates have become more accurate because they mandate that lenders include all costs ahead of time,” Holden Lewis, Bankrate’s senior mortgage analyst, said in a statement.
Closing costs above the average
The highest closing cost was reported in Hawaii, where the average total closing was $2,655 in June. On the other side of the coin, Pennsylvania had the lowest closing cost of $1,837.
The second highest closing cost was reported in the home of the Big Apple. Borrowers will have to shell out an extra $2,560 in New York, Bankrate says, which consists of about $1,103 in origination costs and $1,458 in third-party fees.
In California, the total closing cost ran an average $2,257, which is cut between $1,144 in origination fees and $1,113 in third-party fees.
Costing just a little bit less, Washington D.C. homebuyers payed $2,213 in total closing costs. Origination fees totaled $1,183, and third-party fees added up to $1,030.
The state of Florida had a reported $1,123 in closing costs and $1,057 in third-party fees that totaled to $2,180.
Residents of Texas payed just $5 less in total for their closing costs than those in the Sunshine State. The total closing cost in Texas was $2,175, broken down between $1,032 in origination fees and $1,143 in third-party fees.
Closing costs below national average
Illinois closing costs totaled $2,079, made up of $1,080 in origination fees and $1,000 in third-party fees. Closing costs around the $2,000 mark are common for Midwestern communities, according to the data.
Aside from Pennsylvania, other states that had low closing costs include Wisconsin, Kentucky, South Dakota, Oklahoma and Missouri, all of which had total closing costs below $1,930.