Mortgage rates are low but Bankrate recently announced that mortgage closing costs rose for a second straight year. The company said the average loan origination and title insurance fees on a $200,000 mortgage total $4,070, up 8.8% from a year ago. And the average bank/mortgage lender charges roughly $1,614 in loan origination fees, up 10.3% from last year. (Loan origination fees include services such as underwriting and loan processing fees, along with loan officer or mortgage broker compensation for closing the loan.) New Yorkers can legitimately chant, “We’re #1, we’re #1!” since it topped the survey again for the second straight year, with average closing costs of $6,183, followed by Texas at $4,944 and Utah at $4,906. The folks down in Arkansas are #50 with an average of just $3,378 on the survey’s typical loan: a $200,000 purchase-money mortgage on a single-family home with a 80% LTV, excluding taxes, homeowners insurance, homeowners association fees, prepaid interest and other prepaid items.
Regulation is the clear reason for higher consumer costs, though the Bankrate study tries to present other reasons.