Closing costs on the rise, national survey says

Closing costs have increased by more than 20 percent since 2010, according to a new survey by Bankrate.com.

According to information from Bankrate, mortgage closing costs rose six percent over 2013 after rising six percent in 2012 and almost nine percent in 2011. The average closing cost on a $200,000 mortgage reach $2,539 nationwide in June compared to $2,402 a year prior.

Bankrate’s annual survey found that most of the rise in closing costs is attributed to fees charged directly by lenders. Such fees have risen nine percent, while third-party fees, such as for appraisals, rose only one percent.

A series of new mortgage regulations this year helped drive up closing costs, according to Bankrate analyst Holden Lewis. The rules, designed to ensure borrowers have the ability to repay their loans, took effect January.

“The biggest reason [for higher fees] is the additional regulations,” says Dan Stevens, sales operation manager and vice president of National Bank of Kansas City, in a statement. “The No. 1 at the moment is the qualified mortgage rule. That alone has really added additional man-hours to the mortgage approval process.”

Texas led the nation in average closing costs, at $3,046. The cheapest closing costs are in Nevada, at an average of $2,265.

In its June survey, Bankrate asked lenders in all 50 states and Washington, D.C., for estimates of closing costs for a $200,000 mortgage on a single-family home in which the borrower put 20 percent down. The survey excludes taxes, title fees, property insurance, association fees, interest and other prepaid items.