Question:

How much are closing costs and who pays them?

Answer:

Across the states, different lenders associate different closing costs with their mortgages and it would be inaccurate to come up with a specific applicable-for-all figure of these costs.

However, if you look at the average closing costs in different states, you can have a starting point, for estimating and calculating your own closing costs. The top 10 states with respect to highest total closing costs are shown in the table below.

Rank State or city Origination Title and closing Total
1 Texas $1,566 $2,290 $3,856
2 New York - NYC $1,038 $2,370 $3,408
3 Florida $1,369 $1,999 $3,368
4 California - San Francisco $1,264 $1,853 $3,117
5 Oregon $1,310 $1,750 $3,060
6 Alaska $1,183 $1,829 $3,012
7 Pennsylvania $1,137 $1,872 $3,009
8 Oklahoma $1,238 $1,748 $2,986
9 Ohio $1,222 $1,760 $2,982
10 Washington $1,329 $1,578 $2,907

**The figures are based on a $200,000 mortgage

As for the second part of the question, certain closing payments can be attributed to either the borrower or the lender through negotiations. But some payments have to be made specifically by the lender or the borrower. Some of these are:

Closing Costs Borne by the Home Owner

Down Payment: The amount of loan borrower pays upfront

Lender Fees: Includes lender charges like loan origination, loan locking, documentation etc.

Appraisal Fee: The fee paid to an appraiser for evaluating the value of the house

Credit Report: Cost of pulling credit history of the borrower

Servicing Fee: Lender charges for servicing the borrower's tax payments

Prepaid Interest: Interest on remaining days of the month the loan is closed

Homeowner insurance: Also known as hazard insurance fee to provide the homeowner standard house damage coverage

Tax and insurance escrow reserve: Amount to ensure that the escrow account is never empty for payments, as they are required at different times in a year

Closing Costs Borne by the Lender

House Abstract Fee: Fee for a document that records history of ownership of the property

Lender Insurance: Standard insurance to protect lender against default

Deed Preparation: Fee for preparation of a bill of sale of the property

Deed Tax: State tax as required by the local laws

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