Friday, August 10, 2012

Closing Costs Drop in 2012

Forget the fact that we’re experiencing unprecedentedly low mortgage rates right now.

Forget the fact that homes are more affordable now than they’ve been in years past.

Forget the fact that I’ve been telling you every single Thursday that you should refinance or buy a home now.

As if these weren’t strong enough reasons to believe me, get this: In their annual closing costs survey, found that the average cost to close a home loan in the United States dropped 7.00% over the past year to $3,754.

Bare in mind, these are average closing costs across the nation and they vary from lender to lender. The survey showed that closing fees are different from lender to lender, even within the same county. One lender can charge you $3,000 and another can charge you $1,000.

The state with the highest closings costs in the United States was, you guessed it, New York, which retained its “Highest Closing Cost in the Country” crown for the third year in a row by clocking in at $5,435. On the other hand, if you want cheap closing costs, look no further than Nelly’s home state of Missouri where home buyers pay an average of $3,006 in closing costs.

Like Nelly once prolifically said, “You can find me in St Lou-ay.” If you know what song I’m talking about, leave me a comment and I’ll figure out a way to give you a virtual high-five.

Rick Harper, senior vice president at the nonprofit Consumer Credit Counseling Service of San Francisco, or CCCSOSF for short, explained “It’s a competitive market. One lender may cut its fees slightly to increase originations. So for a time being, that may be the lowest guy out there.”

Harper also stressed the importance of comparing closing costs from each lender just as much as you compare the interest rate from each lender, but be careful because some lenders call different fees by different names. Just do your research.

So what compiles closing costs? Well, most of the fees charged directly by lenders include application fees, processing fees, underwriting fees, origination fees, and document-preparation fees.

However, which fees you’ll be charged can vary from lender to lender , so don’t hold me to this.

Some lenders even offer different programs to help you out with closing costs.

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