North Carolina is the least expensive state for mortgage closing costs, according to a study released this week by Bankrate.com. The state usurped Indiana, last year's winner, for the honor.
Mortgage closing costs - which can include lawyers' fees, title insurance and various taxes – averaged $2,650 in North Carolina, compared to a national average of $3,118. Kansas, Missouri, Maine and South Dakota ranked among the other least expensive states. New York, Texas and Florida were the most expensive states, with New York City residents paying an average of $4,016 in closing costs.
The study also found that the national average for closing costs is up 14 percent over the year, despite a soft housing market. “Oftentimes, consumers forget about the added fees involved in buying a home,” said Bankrate's Holden Lewis. “Closing costs can be extremely expensive if not researched thoroughly.”
Over the past 20 years, the federal housing department has tried several times to reduce mortgage fees with stricter regulations on the marketing of home loans, Lewis said. “The most recent effort was shot down in flames three years ago,” Lewis wrote in this week's report. “The title industry and small lenders vigorously opposed reducing closing costs because it would have cut into their profits.”