As mortgage lenders have faced tougher regulations, the cost of financing a home purchase has shot up more than a third over the past year. Arkansas is the least expensive of all states to close a loan.
The average closing costs on a mortgage used to purchase a home is $3,741, according to Bankrate Inc.’s 2010 Closing Costs Survey. Costs reflect lender origination fees, title fees and settlement fees on a 30-year fixed-rate loan for $200,000 with a 20 percent down payment.
Last year’s average costs were just $2,732.
Bankrate based its findings on a survey of one area in each of 49 states, Los Angeles, San Francisco and Washington, D.C.
“The big rise in average closing costs may scare some homebuyers, but it’s important to keep things in perspective,” Bankrate’s Greg McBride said in the report. “Increased regulation on lenders’ Good Faith Estimates means more accurate estimates and less expenses popping up for consumers on the back end.”
Closing costs were highest in New York: $5,623. The Empire State saw the figure increase from $3,408 last year — when it ranked second. Origination fees accounted for $2,015 of the latest average, while title and closing fees represented a hefty $3,608.
Last year’s No. 1, Texas, slipped to No. 2 this year with $4,708 in closing costs. In 2009, it cost $3,855 to finance a home purchase. This year’s figure included $1,539 in origination fees and $3,169 in title and closing fees.
Utah was next with $4,605 in costs — including $1,431 in origination costs and $3,174 in title costs.
In California, Bankrate divided the state into two regions. In San Francisco, costs were $4,566, ranking it fourth. No. 5 Los Angeles had $4,406 in average costs.
At the other end of the spectrum, average closing costs in Arkansas were just $3,007 — the lowest of any state. Average origination fees in Arkansas were $1,466, while title and closing fees averaged $1,542.
