Watch those closing costs : Rooftop Views

Rooftop Views

Watch those closing costs

Whenever you purchase a home, there are always closing costs. These include fees charged by your lender to make the loan - origination fees, document prep fees and overnight express fees to name a few. They also include fees charged by the title company to close the deal (in Colorado the title company closes, in other states it is done by attorneys). Their fees include title fees for the buyer, fees to close the real estate transaction as well as the loan and fees to prepare the documents.

All these fees have to be paid by you as the Buyer. Either you bring money to the closing to pay for them or you roll them into your loan and pay for them over 30 years.

But closing costs vary from state to state and lender to lender. A recent survey by bankrate.com ranked every state based on the average closing costs charged. As you might expect, New York averaged the highest closing costs followed in order by Texas, Hawaii, Ohio and Florida. The least expensive state was Missouri with Michigan, New Hampshire, Montana and Wyoming rounding out the bottom five.

Average closing costs across the nation are $3,024. The difference on average between New York and Missouri? $1,174. That's a lot of money to a first time homebuyer who is scraping up cash as it is.

What can you do about it? You can shop lenders. Ask up front what their closing costs are and find out if any of them are negotiable. It is not unheard of for mortgage brokers to eliminate some fees or lower their origination fees (which is usually the biggest ticket item) if a buyer indicates they will go somewhere else. Every lender is required to give you a Good Faith Estimate up front that tells you what the lender thinks their fees are going to be. Study this document carefully. Get a GFE from more than one lender. If you have a preference as to which lender you use and their fees are higher, show them the GFE from the other lender and ask them to match. Chances are they will.

It's your money. Spend it wisely.