Housing

Mortgage Loan Closing Costs, Fees Up 6%: 10 States Where Costs Are Highest

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Buyers looking for a new house or homeowners looking to refinance a mortgage get hit with a blizzard of fees and charges that are collectively known as closing costs. The costs vary depending on the amount borrowed and local variations for some standard services.

In June, Bankrate Inc. (NYSE: RATE) conducted a survey of 10 lenders in each of the 50 states and the District of Columbia, seeking a good-faith estimate for a $200,000 mortgage loan for a borrower with excellent credit and a 20% down payment. As Bankrate noted, the final charges very likely will be higher because some of the high-priced items like title insurance, title search, taxes, escrow fees and local government fees vary wildly.

There are a few interesting changes in the rankings compared with last year. In 2012, California was ranked 35th and New Mexico was ranked 43rd. New York, which was ranked first in 2012, fell to 37th. The lowest closing costs were recorded in Wisconsin — a total of $2,119 — but Wisconsin ranked fifth in 2012.

Bankrate’s senior mortgage analyst Holden Lewis offered this response to our query about New York’s fall from the top spot:

For years, New York consistently has been No. 1 or 2. We’re not sure why it dropped so far in the rankings this year. We’ll have a better guess in a year or two, when we can speculate whether it’s a trend or a one-year anomaly. Generally speaking, the most expensive states tend to remain among the most expensive year in and year out, and the same goes with the least-expensive states. But every year, there are a few states that zoom up and down in the rankings. Mostly, we chalk this up to changes in the survey group.

Total closing costs include lender origination fees and third-party fees like appraisal fees, title search and the like. Compared to 2012, when national average closing costs totaled $2.264, costs in 2013 rose 6% to $2,402. Here’s the top 10:

  1. Hawaii: $1,970 in origination fees and $949 in third-party fees, for a total of $2,919
  2. Alaska: $1,925 plus $750, for a total of $2,675
  3. South Carolina: $1,935 plus $723, for a total of $2,658
  4. California: $1,977 plus $662, for a total of $2,639
  5. New Mexico: $1,807 plus $760, for a total of $2,566
  6. North Carolina: $1,840 plus $718, for a total of $2558
  7. New Jersey: $1,804 plus $741, for a total of $2,545
  8. Oklahoma: $1,919 plus $600, for a total of $2,519
  9. Florida: $1,798 plus $719, for a total of $2,517
  10. Delaware: $1,742 plus $760, for a total of $2,502