Mortgage closing costs jumped 36.6 percent as banks and lenders put in more work to get loans closed, according to the 2010 Closing Costs Study from Bankrate.com.
The average cost of origination and third-party fees on a $200,000 loan for a home purchase mortgage ($250,000 purchase price) was $3,741, up from $2,739 last year.
“The big rise in average closing costs may scare some homebuyers, but it’s important to keep things in perspective,” said Greg McBride, senior financial analyst for Bankrate.com, in a statement.
“Increased regulation on lenders’ GFEs means more accurate estimates and less expenses popping up for consumers on the back end.”
Lenders are now subject to penalties for underestimating fees, but there are no such penalties for overestimating costs.
New York led the nation in closing costs at $5,623, followed by Texas at $4,708 and Utah at $4,605 – Arkansas was cheapest at $3,007.
Bankrate’s survey, which assumed the borrower had excellent credit, included origination fees charged by mortgage lenders, along with fees charged by third parties.