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Mortgage Closing Costs Up 6% as Fees Climb

mouse-and-moneyA new survey shows average mortgage closing costs have jumped over the last year, creating more hurdles in a market where declining affordability is already becoming a growing challenge.

According to data from finance site Bankrate.com, closing costs in 2014 are up 6 percent over last year, rising to an average $2,539 on a $200,000 loan (assuming a 20 percent down payment). The figure excludes taxes, title fees, property insurance, and other items.

Origination fees made up $1,877 of that average cost, an increase of 9 percent over the year. Meanwhile, third-party fees accounted for $662, gaining 1 percent.

"New mortgage regulations are the biggest reasons why closing costs went up over the past year," said Holden Lewis, senior mortgage analyst for Bankrate. "The good news is that some lenders have not increased fees."

Texas ranked highest in closing costs, averaging $3,046. The Lone Star State was followed by Alaska ($2,897), New York ($2,892), Hawaii ($2,808), and Wisconsin ($2,706).

At the other end of the scale, Bankrate reported the cheapest closing costs this year are in Nevada, which averaged $2,265.

While loan costs might be rising for consumers, lenders are also feeling the same sting. According to the Mortgage Bankers Association, mortgage banks took an average loss of $194 on each loan originated in 2014's first quarter as per-loan expenses climbed above $8,000.

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.

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