Colorado Ranks as the State with the 12th Lowest Closing Costs in the Country

Posted by TheHomeCart .com on Tuesday, August 24th, 2010 at 6:55am.

For those who are interested in the possibility of moving to Colorado or simply purchasing a new home in the state, they will be happy to learn that Bankrate.com reports that Colorado has the 12th lowest mortgage closing costs among the nation’s 50 states.

According to the annual survey conducted by Bankrate.com, Colorado homebuyers can expect to pay an average of $3,366 in closing costs. This figure assumes the typical loan amount of $200,000 along with a 20 percent down payment as well as a good credit rating. $1,449 of these costs reflects the average origination fee charged by lenders, while the other $1,917 represents the average cost of title and third-party fees. Colorado’s twelfth place ranking represents quite the improvement when compared to 2009, at which time the state was ranked as the state with the 24th lowest closing costs.

The state with the lowest average closing cost was Arkansas, with an average closing cost of $3,007, which is $359 less than Colorado. The researchers also found that Arkansas, Iowa and North Carolina were the only three states to offer an average closing cost that was at least 25 percent less than the national average of $3,741. While Colorado didn’t reach the 25 percent mark, the average closing costs are still significantly less than the national average as it falls $375 below this threshold.

On the other end of the spectrum, New York is home to the highest closing costs in the nation, with an average closing cost of a hefty $5,623. Texas took second place with average closing costs of $4,708, which is a whopping $915 less than New York. Colorado, on the other hand, has an average closing cost that is $2257 less than New York and $1,342 less than Texas.

According to the report, those states with the largest populations are the ones that tend to have higher-than-average closing costs. In fact, the four most populated states of Texas, New York, Florida and California had the highest closing costs. Illinois breaks this trend, however, as it is the fifth most-populous state, yet is among the least expensive states for closing costs with its average title and origination-related costs being just $2,486. One reason for the high costs in Texas is the fact that title insurance costs, which are fixed by state regulators, are quite high. When purchasing a $250,000, for example, the title insurance premium would be $1,644 in the state of Texas.

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