According to Bankrate, New York, Texas and Florida lead as the most expensive states in terms of closing costs.
The average origination and title fees nationwide on a $200,000 mortgage totaled $3,118, according to Bankrate's annual survey of closing costs. The fees in the survey don't include taxes, insurance or prepaid items such as prorated interest or homeowner association dues. Fees in New York City were highest, averaging $4,016. Houston followed with fees that averaged $3,975. Then came Buffalo, N.Y., with fees averaging $3,845, and Miami, at $3,683. North Carolina was the least expensive averaging $2,650.
Concerning is that as the housing market has slumped fees have actually gone up according to Mike Kratzer, president of FeeDisclosure.com, a Bankrate company, which provides consumers with information to help cut their mortgage transaction costs. This is especially true with appraisal fees as lenders want a more thorough job done by appraisers.
The trend in lender fees is to, instead of charging separate fees for underwriting, processing and document preparation, to lump these lender's fees together into a higher fee than the formerly separate fees added together. Or, the other trend for lenders is to add e-mail, PDF and document-printing fees.
Most of the problem seems to be with the lenders and not the title companies or agencies. But, since the title company is a neutral party, it is up to the purchaser or his or her Realtor to catch some of these junk fees.
"Question every cost. You don't just have to take it," says Christopher Cruise, who trains mortgage brokers and loan officers. "If it says 'administrative,' or 'doc prep' or 'miscellaneous,' it's just pure junk."
Even mortgage executives, when e-mailing among themselves, refer to these fees disparagingly. According to the August issue of Conde Nast Portfolio, Countrywide executives referred to some fees as "junk" and "garbage." When ordering a low-cost mortgage for a politician, the executives would specify "no junk" or "no garbage fees."
Also, be aware of double-dipping. Sometimes a loan broker will charge an origination fee and a broker fee, but this is the same thing.
If the fee seems suspicious, ask for it to be waived.
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