Closing Costs Fall

stefanlevine Real Estate 5 Comments

 

RESPA changes prove to benefit homebuyers-Stefan

 

 

Mortgage Closing Costs Fell 7% for Homebuyers

By Les Christie @CNNMoney August 7, 2012: 11:53 AM ET

The closing costs of getting a mortgage have dropped.The closing costs of getting a mortgage have dropped.

NEW YORK (CNNMoney) — Federal regulations are helping to significantly reduce the amount new homebuyers are paying come closing time.

The average cost of closing on a mortgage has fallen by 7.4% over the past year, according to a recent survey by Bankrate.com. At the end of June, a homebuyer looking to close on a $200,000 mortgage with 20% down paid an average of $3,754, $300 less than 12 months earlier.

Included in those costs are origination expenses, such as application fees and the cost of doing credit checks, and third-party fees, such as those paid for title searches and insurance.

The decline can be attributed to new regulations that require lenders to be more accurate when estimating closing costs for borrowers, said Greg McBride, Bankrate’s senior financial analyst.

The regulation, which was put in place two years ago as part of the Real Estate Settlement Practices Act requires lenders to provide a “good faith estimate” of third-party fees that is within 10% of the actual amount the buyer will pay.

“The big drop in third-party fees indicates the lenders are doing a better job at estimating what the costs will be,” said McBride.

The most expensive state for closing on a home was New York, where total origination fees and closing costs averaged more than $5,400 for a $200,000 mortgage, according to Bankrate. Texas, Pennsylvania and Florida also cost far more than the national average.

Missouri was the cheapest, with total borrowing costs averaging just over $3,000. Other states where closing costs remain low include Kansas, Colorado and Iowa, Bankrate said.

Even on a neighborhood level closing costs can vary significantly, said McBride. Borrowers can save money by getting at least three estimates and paying close attention to the total costs of obtaining a loan rather than getting seduced by low advertised interest rates.

“Borrowers don’t want to get tunnel vision shopping for the best mortgage deal by only looking at the interest rate,” he said. “Closing costs are a big line item and savings there can be quite significant.” To top of page

 

 

 

 

About the Author
author photo

stefanlevine

Facebook Twitter LinkedIn

I embrace the challenges of putting deals together in this ever-changing and fast moving business and I am open for business! I work in residential and commercial in both purchase and lease for both end users and investors.

5 question about “Closing Costs Fall”

  1. Without hesitation I say, this site provides better content than the average I find on the internet. I well liked reading what you wrote, and I will surely make use of this. Thank you.

  2. Many thanks for taking this chance to speak about this, Personally i think strongly regarding it and I make use of learning about this subject. When possible, as you gain data, please update this website with new information. I’ve found it extremely useful.
    Welcome to my website http://www.about-dogs.zoomshare.com.

  3. Good blog post, nice efforts. It couldn’t appear to have been penned any better. Reading this article piece of writing reminds me about my old boss! He usually kept babbling about this. I will email this post to him. Pretty confident he will probably have a high-quality read. Appreciate your posting!

  4. Makeup tips says:

    A very impressive article. Well prepared. Very motivating!! Go off on to facilitate way

  5. santa clause letters says:

    A lot of of whatever you articulate happens to be astonishingly legitimate and that makes me ponder why I hadn’t looked at this with this light previously. This particular article truly did switch the light on for me as far as this specific issue goes.

Have a question not answered here? Ask us!

Your email address will not be published. Required fields are marked *