Title insurance appears to go up in price where housing is dense, increasing closing costs for buyers and sellers, suggests a new study by Bankrate.com . Other variances that impact closing costs from state to state are fees for settlement services and title searches.
Fees controlled by lenders, origination costs, do not appear to vary much from state to state.
Bankrate.com surveyed nine to 15 lenders in every state and Washington, D.C. to estimate closing costs on a mortgage at $180,000 for a family home worth $225,000.
The average buyer in Laramie, Wyoming would pay $2,101 in origination fees, title insurance, and other closing costs, but a buyer in New York City would pay $3,907 for the same loan.
New York was the highest cost for title insurance at $1,451, while North Carolina boasted the cheapest title insurance at $439. Wyoming priced at $461. The national average for title insurance was $756, suggesting that the more densely populated an area is, the more likely that title insurance will be more expensive.
With more properties that turn over more frequently, there is inherently more risk. With fewer properties, there are fewer transactions and less risk for fraud because rural participants in a transaction are more likely to know one another.
"And some states simply represent greater risks associated with doing business there," James Maher, executive vice president of the American Land Title Association, told Bankrate.com. He explained that all states have differing customs and laws, and differing judicial and regulatory climates. "There are other reasons for price variations. Some places have "all-inclusive" title insurance, where the price includes not only the insurance premium, but other services such as title search, examination of title, closing and other settlement services. Other places are called "risk-only" jurisdictions, where the insurance premium is itemized separately from related services."
Bankrate.com found the national average for total buyer closing costs on $180,000 loan was $2,748.
To see the state-to-state comparisons, click here .
