A new study released by Bankrate, Inc. reveals that the costs associated with buying a home are on the rise. Bankrate's 2010 Closing Costs Survey reveals that the average origination and title fees on a $200,000 mortgage this year totaled $3,741, up from $2,732 in 2009. New York state was highest at $5,623; Vermont was 40th at $3,372.
In the study's geographical breakdown, with New York leading the nation Texas, Utah, San Francisco, and Los Angeles roundg out the top five. Arkansas is the least expensive area with an average fee of $3,007, replacing Nevada, now number 34, at the bottom of the list.
One of the reasons for such a dramatic rise in the average estimated closing costs across the nation has to do with new regulations implemented in January of this year. When providing a potential borrower a Good Faith Estimate (GFE) of costs, regulations now require lenders to provide a Title and Closing Fee estimate within 10 percent of what the final cost will be; in previous years, estimates could fall lower on the spectrum without penalty for the lender.
"The big rise in average closing costs may scare some homebuyers, but it's important to keep things in perspective," said Greg McBride, CFA, senior financial analyst for Bankrate.com. "Increased regulation on lenders' GFEs means more accurate estimates and less expenses popping up for consumers on the back end."
For this study, Bankrate surveyed one area in 49 states, two areas in California (Los Angeles and San Francisco) and theDistrict of Columbia. Researchers picked a ZIP code in some of the largest cities in each state and requested information on the closing costs for at $200,000 loan. They requested fees on a 30-year, fixed-rate mortgage for a borrower with a 20 percent down payment and good credit to buy a single-family house. Bankrate's survey includes lenders' origination fees and title and settlement fees, and not taxes or prepaid items.
NEW YORK, Aug. 16 /PRNewswire-FirstCall/ -- The full results of the study can be seen here at www.bankrate.com/finance/mortgages/2010-closing-costs/.
2010
2009
State or city
Origination
Title and Closing
Total
1
2
New York
$2,015
$3,608
$5,623
2
1
Texas
$1,539
$3,169
$4,708
3
16
Utah
$1,431
$3,174
$4,605
4
4
California - San Fran
$1,386
$3,181
$4,566
5
14
California - Los Angeles
$1,419
$2,987
$4,406
6
6
Alaska
$1,936
$2,391
$4,327
7
8
Oklahoma
$1,352
$2,902
$4,254
8
7
Pennsylvania
$1,340
$2,897
$4,236
9
28
New Jersey
$1,338
$2,772
$4,110
10
27
Idaho
$1,365
$2,711
$4,077
11
18
Massachusetts
$1,548
$2,477
$4,025
12
3
Florida
$1,237
$2,751
$3,987
13
9
Ohio
$1,446
$2,540
$3,985
14
42
Rhode Island
$1,989
$1,983
$3,972
15
39
Arizona
$1,437
$2,514
$3,950
16
34
Wyoming
$1,460
$2,462
$3,922
17
38
Minnesota
$1,403
$2,517
$3,920
18
23
Louisiana
$1,491
$2,406
$3,897
19
15
Virginia
$1,528
$2,355
$3,883
20
19
Michigan
$1,424
$2,380
$3,804
21
11
North Dakota
$1,515
$2,285
$3,800
22
41
DC
$1,363
$2,322
$3,685
23
35
Delaware
$1,401
$2,248
$3,649
24
20
West Virginia
$1,421
$2,216
$3,637
25
51
Kansas
$1,453
$2,161
$3,615
26
45
Nebraska
$1,529
$2,079
$3,608
27
10
Washington
$1,452
$2,154
$3,607
28
31
Georgia
$1,402
$2,201
$3,604
29
26
South Carolina
$1,366
$2,155
$3,522
30
30
Alabama
$1,529
$1,983
$3,512
31
43
Illinois
$1,422
$2,083
$3,505
32
12
Tennessee
$1,450
$2,033
$3,483
33
13
New Mexico
$1,401
$2,079
$3,480
34
52
Nevada
$1,248
$2,223
$3,471
35
50
Indiana
$1,452
$2,013
$3,465
36
21
Hawaii
$1,303
$2,139
$3,442
37
49
Maine
$1,456
$1,976
$3,432
38
40
Maryland
$1,481
$1,921
$3,402
39
24
Connecticut
$1,408
$1,983
$3,391
40
48
Vermont
$1,483
$1,889
$3,372
41
29
Colorado
$1,449
$1,917
$3,366
42
32
South Dakota
$1,458
$1,905
$3,363
43
36
New Hampshire
$1,533
$1,825
$3,358
44
47
Missouri
$1,344
$2,012
$3,356
45
44
Kentucky
$1,448
$1,893
$3,341
46
25
Mississippi
$1,480
$1,855
$3,335
47
5
Oregon
$1,450
$1,883
$3,333
48
22
Wisconsin
$1,491
$1,812
$3,303
49
33
Montana
$1,409
$1,890
$3,298
50
37
Iowa
$1,477
$1,784
$3,261
51
46
North Carolina
$1,476
$1,779
$3,255
52
17
Arkansas
$1,466
$1,542
$3,007
Source: Bankrate, Inc. 8.16.2010
The Bankrate network of companies includes Bankrate.com, Interest.com, Mortgage-calc.com, Nationwide Card Services,Savingforcollege.com, Fee Disclosure, InsureMe CreditCardGuide.com, Bankaholic, CreditCards.com and NetQuote. Each of these businesses helps consumers to make informed decisions about their personal finance matters. The company's flagship brand, Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. Bankrate.com is the leading aggregator of rates and other information on more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com reviews more than 4,800 financial institutions in 575 markets in 50 states. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! (Nasdaq: YHOO), America Online (NYSE: AOL), The Wall Street Journal and The New York Times (NYSE: NYT). Bankrate.com's information is also distributed through more than 500 newspapers. Bankrate, Inc. was acquired by Apax Partners, one of the world's leading private equity investment groups, in September 2009. Apax operates across the United States, Europe and Asia and has more than 30 years of investing experience. For more information on Apax, visit:www.Apax.com.