One of the costs of a mortgage loan is the closing costs, or the fee you pay when you finally pay your mortgage off or sell your home. The average closing costs nationally cost about ten times as much as a payday loan. The national average for closing costs has been going up. Added to the turmoil and more stringent regulations in place it may be awhile before the real estate industry has totally recovered. Resource for this article – Mortgage loan closing costs on the rise by Personal Money Store.
Where closing costs are the greatest
New York, according to Bankrate, has the honor of having the highest closing costs in the nation. The closing costs people pay in New York would have just about anybody hard up for a loan cash. The average New York closing costs for a $ 200,000 mortgage is $ 5,623. It’s too bad there is not closing cost modification to go with mortgage loan modification. Most people would have to look into getting a personal unsecured loan for those kind of costs, as not everybody has enough instant money on hand to pay that much. Texas, Utah, California and Alaska were the five most expensive states to close a mortgage in.
Closing costs are increasing everywhere
Mortgage loan closing costs went up 36.6 percent since last year. Lender costs rose 22.8 percent, and third party fees went up 47.2 percent. The average cost from last year was $ 2,739 which went up to $ 3,741 for this year. The increase of $ 1,000 is about 3 times more than the normal loan until payday. Since the housing market is depressed, funding for a mortgage loan is harder to secure. There is also a lot more regulation concerning consumer finance.
There is more cost to lenders
The costs for lenders has also gone up, which is part of what fueled the fee increase. Lenders have to guess what the closing costs are, and if they guess too little they have to pay fines. The Federal Reserve also banned bonus incentives for loan brokers who sell customers on higher rates than they might normally pay, as outlined by the Los Angeles Times. However, if turning a profit depends entirely on bilking the consumer, then change is needed to a business.
Citations
Bankrate
bankrate.com/finance/mortgages/2010-closing-costs/
LA Times
latimesblogs.latimes.com/money_co/2010/08/federal-reserve-mortgage-lender-bonuses.html
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