Oregon Ranks Favorably in Closing Cost Survey

November 22nd, 2005

Oregon is one of the least expensive states for fees and expenses required for buyers to close transactions, according to a 2005 Bankrate.com survey.

First, a definition. Closing costs are fees and expenses paid by a buyer to obtain a mortgage and transfer ownership of a property. These fees can include loan application and origination fees, title search, title insurance, fees for administration, appraisal, escrow costs, document preparation, processing, tax service and underwriting. Buyers are also responsible to pre-pay homeowner insurance and property taxes, but these expenses were not included in the Bankrate survey.

Bankrate found that fees and title insurance averaged $2,748 nationally on a $225,000 transaction with $180,000 being borrowed. Oregon ranked 45th of 51 states (including D.C.) with an average of $2,404 in closing costs. The top five most expensive states were New York (at a whopping $3,907), followed by Hawaii, Alaska, New Jersey, and Florida. Wyoming is the least expensive state.

From the survey:

Bankrate surveyed nine to 15 lenders in each state, plus Washington, D.C., and asked them to estimate the closing costs on a $180,000 loan to a buyer with an excellent credit history who had made a down payment of at least 20 percent on a single-family home in the state’s largest city. The survey showed that:

• The biggest differences among states came from the wildly varying costs for title insurance;
• fees for settlement services and title searches accounted for much of the rest of the disparities;
• origination costs — the fees that lenders control — didn’t vary much from state to state (but they did differ from lender to lender).

The cost of title insurance is tied to risk, and in the business of property, the top risk is fraud. Nice to know that Oregon is seen as a low-risk region.

Read here for details of the Survey and State Rankings.

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Related posts:

1. Oregon Ranks Low in State Taxes Survey
2. Oregon Ranks 16th in Property Taxes
3. Moving? Consider the Cost (of Living, that is)

Entry Filed under: First-Time Buyers, Mortgages, National News