New York, Texas Have Highest Closing Costs

Buying a home may be cheaper these days, but the cost of closing on a mortgage has increased in most states.

Nationwide, the average origination and title fees on a $200,000 purchase mortgage totaled $4,070, according to Bankrate's annual survey of closing costs. That's an 8.8% jump compared to 2010 when the average closing costs totaled $3,741 .

For the second year in a row, the states with the highest closing costs are New York, where costs average $6,183; Texas at $4,944; followed by Utah with $4,906. Next was California, where average closing costs in San Francisco totaled $4,832. New York and Texas have dominated the top spots for five years.

The cheapest places to get a mortgage are Arkansas, North Carolina and Indiana. In each of these states, the average closing costs are close to $3,400.

Most of the jump in closing costs is tied to fees charged directly by lenders.

On average, lenders charged about $1,614 in origination fees this year, up 10.3% from last year. Origination fees include lender charges for services such as underwriting and processing.

Fees imposed by third parties, including title, appraisal, postage/courier and survey charges, averaged $2,456, up 7.9% from 2010.

While some third-party fees rose, title insurance premiums changed little compared to last year. The survey excludes property taxes, homeowners insurance and recording fees.

Many lenders and mortgage professionals claim that origination fees have increased because of stricter mortgage regulations that the government has implemented in the last two years.

"New regulations require more staffing and cost more money," says Jason Auerbach, division manager of First Choice Loan Services in New York City.

Auerbach says some of the "new" regulations -- which vary from having to take extra steps to verify a borrower's income and employment to disclosure forms and licensing-related matters -- have been in place for a couple of years already, but the mortgage industry takes them more seriously now. New forms and regulations that are still in discussion are influencing lenders already.

"Banks are self-regulating," Auerbach says. "They want to make sure there is nothing in that loan that is going to make Fannie and Freddie uncomfortable."

Fannie Mae and Freddie Mac buy most mortgages and have almost no tolerance for missing documents or errors in paperwork.

Neil Garfinkel, a New York real estate attorney with AGMB Law, says he has noticed firsthand the increased caution, as he has been retained to help several smaller banks seeking counseling related to mortgage compliance issues.

Home Mortgage closing costs are negotiable: home loan fees « Blog ...

Home Mortgage closing costs are negotiable: home loan fees

According to a morgage loan officer Don Patrasek, the morgage closing costs are negotiable and you should questions the fees that you are handed with. You should negotiate for a different rate of fees to save yourself some money. There will be time when the lender or broker could have fees that are meant to be profit so you have to negotiate it down. You would pay too much if you don’t negotiate if it’s negotiable. The best advice is to ask for an explanation of high morgage rate associated fees and ask for a discount. The catergories that are negotialbe include attorney’s fee, administrative fee, appraisal fee,loan discount, and loan origination fee.

Usually fees are to cover the morgage company’s administrative cost. The fees is different with each lender and you should assess it before you pay. You should know the standard cost with most lenders. The more work they do to help your application go through the more they would charge you. If a morgage company has to do some work to get your employment history together or credit history together than they can charge you for that.  They have to work harder to get all documents together and thus will charge you for their work. You should have all of your document together before you come to their office. Documents are required for all loan types because they have to see proof of your income. Morgage broker also get a double fee when it comes to loan origination fee and that is from the buyer and the bank. The loan origination fee is around .5%-2% and can be negotiable.

Another type of fee that is negotiable is the application fee. This fee is usually asked up front for an appraisal coverage and a credit report. A credit report is anywhere around . The appraisal cost is usually around 0-0 for a single family unit. The cost is more with multi-family units cost. You should not pay for fees that are not applicable to the process. It’s illegal if you’re charge for service that wasn’t render to you. The fee should be paid after you have your service done and not before hand unless it’s required to get started. This is like getting your home fix, you would only pay afterward and not beforehand.

Other fees that are negotiable include the processing fee, underwriting fee, wire transfer fee, or funding fee in the closing cost. These fees are not something that is necessary and you can negotiate it. It’s more of a fees to profit. This is there responsibility to run a few things for you. This is like a grocery store billing you for writing them a check. These fees are more beneficial to them then to us. The other costs are necessary in order to get the process going for you. You can pay them but don’t forget to negotiate. When you’re in the lender office and getting a consultation you can also ask for an estimate closing cost. You should question any fees that look too high or unsual and compare it to the standard fees. You should negotiate any closing cost that you can to minimize payments.

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