Bankrate Releases 2006 Closing Cost Survey

According to Bankrate’s 2006 National Closing Cost Survey, which provides a comparison of lender, title and settlement fees in 51 geographic locations, the average closing cost totaled $3,024 while the median cost was a little lower at $2,978. New York once again took the high-priced crown, at $3,887 while Missouri was the lowest priced at $2713, for a difference of $1,174. Appraisal costs represent 11 percent of the total nationwide average.

Bankrate said closing costs can be divided into three categories. The first is loan fees, which are charged by the lender. The second is title and settlement fees charged by parties other than the lender. The third category is taxes and prepaid items, such as homeowners insurance, association fees and prorated interest. Bankrate's survey includes loan fees and title, and settlement costs, not taxes and prepaid items, although there are certain taxes that are baked into the numbers in some states.

Bankrate’s Closing Cost Survey was conducted by obtaining eight to 10 good faith estimates in each state from the Web sites of online lenders. Researchers picked a ZIP code in some of the largest cities in each state and requested information on the closing costs for a $200,000 loan. They requested fees on a 30-year, fixed-rate mortgage for a borrower with a 20 percent down payment and good credit to buy a single-family house. The geographic locations include cities in all 50 states and the District of Columbia. Each state listing includes their current ranking, compared to their 2005 position, a detailed breakdown of average closing fees for that state, and a printable worksheet for consumers to compare average costs to their lender’s fees. The study does not include taxes, other governmental fees and escrow fees.

In conjunction with the Closing Cost Survey, Bankrate commissioned a national poll conducted by Roper asking 1,005 consumers about their closing cost fees. Of the homeowners surveyed, 13 percent said that they paid more on their closing costs than what they were told by their lender. Only 8 percent found their lender’s estimates to come in lower than expected. However, the majority of homeowners (60 percent) found that their closing costs were about the same as the estimate they received from their lender.

Bankrate is an Internet consumer banking marketplace that provides financial applications and information to a network of more than 75 partners, including Yahoo!, America Online, The Wall Street Journal and The New York Times. To view the survey, go to www.bankrate.com/closing.

Back to Articles