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Want to refinance? Beware of those closing costs
Photo credit: Newsday/Danielle Finkelstein
Thanks to mortgage rates dropping to the lowest level in 40 years, many Long Island homeowners are refinancing. But did you know that New York State has the highest closing cost in the nation this year, according to an annual study by Bankrate.com, which tracks lending rates.
The average closing cost on a $200,000 loan was $5,623 -- $2,015 in lender fees and $3,608 in title, appraisal, legal and other third-party fees, excluding mortgage taxes, data show. The state was second in last year's study but overtook Texas.
New York's closing costs have traditionally been high for three main reasons, said Warren Goldberg, a mortgage planner with Blackstone Mortgage Corp., a Woodbury-based mortgage broker. With housing costs high, the bigger the loan, the bigger the mortgage tax, he said. In closings here, attorneys represent lenders and borrowers, unlike other states, where real estate agents prepare the contracts and other work. In general, the cost of doing business is higher in New York state, which has more mortgage regulation than many other places, he said.
"Even though the cost in New York state may be higher . . . that doesn't necessarily mean it's a bad thing," Goldberg said. "I've seen too many situations where people making purchases in other states, because they did not have the (legal) representation, wound up getting in trouble."
Most costly closings:
1. New York - $5,623
2. Texas - $4,708
3. Utah - $4,605
Least costly closings:
1. Arkansas - $3,007
2. North Carolina - $3,255
3. Iowa - $3,261
Tags: refinancing , Blackstone Mortgage Corp. , mortgages , closing costs
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