A surge in third-party fees was behind an increase in average closing costs on residential loans. The Aloha State had the most expensive loans.
Closing costs on a hypothetical $200,000 loan to finance a U.S. home purchase with a 20 percent down payment averaged $2,128 this year.
The average, which is based on a loan to a borrower with excellent credit, jumped from the previous year, when the average came to $1,847.
The latest findings were reported by Bankrate.com, which said it
obtained Loan Estimates from up to 10 lenders in each state during June.
“Costs include fees charged by lenders, as well as third-party fees for services such as appraisals and credit reports,” the report stated. “The survey excludes title insurance, title search, taxes, property insurance, association fees, interest and other prepaid items.”
This year’s average included $1,058 in average origination fees,
barely changed from $1,041 in 2015.
But
average third-party fees surged to $1,070 in 2016 from $807 a year earlier.
Borrowers in Hawaii paid the highest average closing costs:
$2,655.
New York was No. 2 with average costs of $2,560, followed by North Carolina’s $2,409, Delaware’s $2,358 and South
Carolina’s $2,322.
The cheapest home loans in the country were in Pennsylvania, where closing costs averaged $1,837.
“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,” Bankrate.com Senior Mortgage Analyst Holden Lewis said in an accompanying announcement. “This is great for consumers who can now comparison shop with more confidence.”
