Closing Costs Rising

Even as housing costs have come down over the last few years throughout most of the country the amount of money paid in closing costs has increased by 8.8%. Nationwide the average closing costs for origination and title fees on a $200,000 purchase mortgage totaled $4,070 which is up from 2010’s average of $3,741. So exactly what costs have risen that would necessitate this increase? The majority of the increased costs are tied directly to fees charged by lenders, most specifically origination fees. The average origination fee is $1,614 this year, up 10.3% over last year. Other fees charged by third parties were also up nearly 7.9% from 2010.

Lenders say this increase is justified and is linked to the increasing amount of regulation they must comply with that has been passed in the last two years. Historically lenders have maintained increased regulation will impact mortgage fees which must be passed along to buyers and this is proving to be a reality. Some of the new regulations require additional steps to be taken such as having to verify a borrower’s income and employment, filing of additional disclosure forms, or licensing-related matters. These additional regulations may well be worth the additional costs, but it’s unfortunate that the extra cost is passed along to the consumer and makes obtaining a mortgage more costly.

Stephen Woodall
REALTOR, GRI @ Long Realty Company
Stephen has made real estate his full-time career and passion since 2008, primarily specializing in the Foothills & the Northwest Tucson areas of Oro Valley and Marana. He is a multi-million dollar producer, representing both sellers & buyers. Stephen has tremendous experience in new home sales, listing & selling primary residences, listing & selling vacant land, listing & selling luxury homes, investment properties, rentals, and real estate development parcels.

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