Well, it had to happen, and it has. The costs for buying a home are going up. Not just interest rates, but bank fees as well. Why? Because they can, and because what-comes-down pretty much always goes-back-up.
According to CNN, the fees associated with closing your loan have gone up on average nationally about six percent. Origination fees alone are up about 8.4 percent over this same time period last year.
According to BankRate.com, “Banks realize that rates are going to go up and are trying to capture fees early on,” he says. “They know when rates go up, loan applications plunge, so they are trying to generate more earnings on anticipation of lower application volume and lower profits.”
Many lenders say part of the reason for increased fees is that they have been facing increased expenses when implementing new mortgage regulations imposed by the Consumer Financial Protection Bureau. Many of these rules go into effect next year, but lenders are gearing up for compliance in advance.
“The cost of compliance is enormous,” says Anders Hostelley, chief production officer at Honolulu HomeLoans.” As a mortgage banker, we are having to staff up.”
Hawaii has the highest closing costs in the country at an average of $2,919. That’s mainly due to the high cost of running a business in the state. In addition, there are fewer mortgage professionals in Hawaii.
Alaska comes in second with an average closing cost of $2,675, followed by South Carolina, at an average of $2,658 and California at $2,639.
Buyers in Wisconsin pay the least, at an average of $2,119, followed by Missouri, at $2,118 and Kansas at $2,193.
To find the rates in your state, check out this chart on BankRate.
Have you noticed a change in fees? Do you know how to buy real estate without going to a traditional lender?