Already one of the costliest states in the country in terms of closing costs, average Massachusetts closing costs are on the rise, the Worcester Business Journal reported August 29, 2011.
According to a report by Bankrate.com, a national financial advice Web site, Massachusetts closing costs have risen about 5.4 percent since last year. Although lower than the National closing costs increase of 8.8 percent, Massachusetts is the 15th most costly state in terms of closing costs in the country.
“Last year the average cost to close on a $200,000 mortgage with a 20-percent down payment in Massachusetts was $4,025. This year, that figure was $4,244, including $1,594 for loan origination and $2,650 for title and closing fees,” reported the Worcester Business Journal.
The increase in closing costs may have something to do with the rising number of foreclosed and distressed properties on the market. Distressed property closings take more time and legal paperwork, and thus more money than a typical closing may require.
It isn’t just legal fees that are on the rise, we could also see costs of appraisals increase in the near future.
Appraisal costs may be on the rise starting this month, as new federal law requires appraisers to use a more detailed form, known as the Uniform Appraisal Dataset, for any home mortgages sold on the secondary market to organizations like Fannie Mae and Freddie Mac. With the new form being more labor intensive and taking up more of an appraiser’s time, it would be no surprise to see costs for appraisals to increase.
Prospective home buyers should closely consider closing costs when deciding on which lender to use because such costs impact the overall cost to of borrowing. Real estate buyer agents and real estate lawyers can help home buyers evaluate potential lenders.