Mortgage closing costs plunge 7 percent

August 10th, 2012

Mortgage closing costs declined significantly.

It may be more affordable for those transferring to a new location to purchase a home, as closing costs for mortgages dropped by seven percent compared to last year's figures, according to a survey from Bankrate.com.

The average cost of closing on a mortgage declined to $3,754, while title insurance and third-party expenses dropped 12 percent compared to the previous year. Average origination fees dropped one percent, according to the website's eighth annual closing costs survey.

"This is the second year in which lenders are required to estimate third-party fees within 10 percent of the final cost," said Greg McBride, chartered financial analyst and senior financial analyst for Bankrate.com. "It seems like they're getting more accurate, which helps explain the sharp decrease in these fees over the past year."

The most expensive closing costs were seen in New York, with an average of $5,435, the survey added. The least expensive state was Missouri, where fees averaged $3,006.

A mortgage consultant may be better able to explain all of the costs necessary for a transferee to purchase a home in the destination area. While some closing costs are negotiable, borrowers should know the average fees before starting.