A new report from Bankrate included a lot of interesting takeaways regarding the broader U.S. mortgage space, but those in the “Lone Star State” have a lot to be concerned about, as far as the report goes. According to Bankrate, Texas is the most expensive state for consumers to take out a mortgage loan.
Bankrate’s analytics took lenders’ origination fees and third-party fees into account in its annual report, which analyzes the average closing costs of mortgage products. Single-family homes were evaluated in the report, with the given of a 20 percent down payment and the assumption that consumers have good credit.
However, Bankrate only culled statistics from the largest city per state, and with Houston representing Texas in the 2014 survey, Texas climbed from 13th most expensive last year to first place this year, with an average closing cost of $3,046. This included $2,280 in lenders’ origination fees and $766 in third-party costs.
A report from Lubbock Online added more insights on the high costs of closing a home loan in Texas. The report quoted Texas Tech Federal Union mortgage team manager Jay Herrin, who said that he typically gets better offers by working with school alumni. Further, Herrin added that he “seems to always be an eighth or a quarter of a percent under most of the larger metro areas” in offering lower costs, which may or may not be because of his institution’s credit union status.
Herrin did also note that rates and mortgage fees “seem to go up a little bit” in larger cities in Texas, while another bank executive, Peoples Bank senior vice president/mortgage development manager Renessa Knowles, was quoted as saying that mortgage fees in Lubbock have gone up a bit since the global economic crisis. She believes this is due to recently-implemented mortgage reforms, including a suite of requirements implemented this year by the Consumer Financial Protection Bureau.
On a broader basis, the average closing costs for the entire United States were at $2,539, an increase of 6 percent year-over-year. Alaska ($2,897) and New York ($2,892) were behind Texas as the second- and third-most expensive states for closing costs, while closing costs were most affordable in Nevada, where they averaged only $2,265.