Mortgage Closing Fees by State

closing costs by state

There are plenty of different financial elements to consider when buying a new home, but fees that you might not be anticipating are your closing costs – those final fees that you won’t know for sure until the paperwork is right in front of you. You can get a good faith estimate of your anticipated closing costs – and it should be close – but you won’t know what you’ll actually pay until you’re nearly ready to close the deal.

And since every state is different in this regard, it’s a good idea to familiarize yourself with the average closing costs in your area in order to avoid any surprises come signing time.

Nationwide Highs and Lows

According to a survey conducted by, the highs and lows of average closing costs have fluctuated a little this year. However, the top two spots remain the same, with New York and Texas topping the list of highest closing costs, followed by Pennsylvania, Florida and Oklahoma. In these states, average closing costs range from $2700 to $3700.

Arkansas, Iowa, Colorado, Kansas and Missouri are all on the opposite end of the spectrum, coming in with closing costs averaging between $1450 and $1750. Given that such a wide range exists, you’ll need to do your research to figure out where your closing costs might fall.

Hiring a Real Estate Attorney

As mentioned before, every state has different requirements for closing. Some states – including Kentucky, Georgia, Delaware and Hawaii – require an attorney to be used for the closing of a real estate deal.

Why get a lawyer involved? Ideally, an attorney will be a neutral, third party who can oversee the real estate deal and protect everyone’s interests.  In some states, only a lawyer can prepare the documents connected to closing. But there are also buyers who feel more comfortable having a lawyer involved in the process – even if their state doesn’t explicitly require one. If you’re one of these people, a quick Google search can find qualified real estate lawyers near you.

The Fees

In general, the rule of thumb that’s commonly used to estimate home buying costs states that closing fees should be 1.5% of your loan size – but that number is on the rise. Now, you can generally estimate closing costs at anywhere from 1.5 to 2%, although states have enacted legislation to ensure that closing costs are at least 1.5% of your loan. This is done to keep you invested the house you buy – which is good for your states’ economic health.

So who gets the money from all these closing costs? In fact, a number of different parties make money of the closing of real estate deals, including the seller, the real estate agent, loan brokers and lenders, and the state. Remember, every deal that’s closed is good for the economy as a whole – something that should ease the pain of paying closing costs a little.

The Big Picture

Here’s the big picture on closing costs… The amount you pay in closing costs are usually set, but who pays them is negotiable – you just need to know how to play the game!

When it comes to covering closing costs, it’s you versus the seller, and sometimes one party simply has the better position. Sometimes, it comes down to how badly you want the property compared to how aloof you can play it.  You can actually get the seller to pay all the costs if the stars are aligned for you.

For example, suppose the house you’re buying is a complete fixer upper. The sellers know that you could potentially walk away (as there are other homes that won’t need as much work), so they may be inclined to make you happy by covering more of the closing costs.

Or perhaps you want a house that you’ll eventually turn into a rental. The seller knows that since you aren’t actually going to be living in the home, you could buy just about any property – and once again, you’ll be more likely to have your closing costs paid by the other party. If the seller is really anxious to unload the house, you could get all of your closing costs paid – minimizing the amount you need to bring to the table in order to close the deal your new home.

Often, the amount you’ll pay in closing costs comes down to supply and demand.  If you’re buying in a seller’s market, or desperately want to get the house you’ve put an offer on, you’ll likely end up paying more in closing costs than someone who’s willing to walk away from a deal.  It’s up to you to evaluate all of these different factors and ensure that you wind up with a deal that works for all the parties involved.



Topics: Mortgages

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