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Average cost of closing down year-over-year

Posted on Wednesday, August 5, 2015 at 10:21:50 AM

The average amount that borrowers pay to close on their home loans has ticked down slightly year-over-year. 

A Bankrate survey on closing costs found that they dropped 7.1 percent from $1,989 in 2014 to $1,847 this year. The survey comprised of Good Faith Estimates from 10 lenders in a large city in each state, as well as Washington, D.C., for a $200,000 mortgage. The averages are a combination of lenders' origination fees and third-party costs such as appraisal and inspection services. 

The hypothetical loan used for the survey was for the single?-family home, for a borrower with excellent credit and a 20 percent down payment. 

Closing costs vary by state as well. Ohio is the cheapest to close in, with the average cost coming out to $1,613, according to Bankrate. Idaho, Wyoming, Utah and Maine round out the list of cheapest states to close in. 

Hawaii is the most expensive state, with an average closing cost of $2,163, the news outlet found. The other four least affordable states to close in were New Jersey, Connecticut, West Virginia and Arizona. 

Certain variable costs were excluded from the survey, though, which could lead to closing costs a bit higher than Bankrate's averages. It is important that borrowers in search of residential financing understand what they will pay to close, in addition to the other costs of purchasing a home.