NY tops nation in pricey closing costs

New York State has the highest average closing costs in the nation this year, said 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. With Long Island’s higher home prices, closing costs on a house sold for $380,000, July’s median closing price here, could easily surpass $9,000.

The state was second last year but overtook Texas.

New York’s closing costs have traditionally been high for three main reasons, said Warren Goldberg, pictured above, a mortgage planner with Blackstone Mortgage Corp., a Woodbury-based mortgage broker. High housing costs lead to bigger loans, which means a bigger mortgage tax bill, he said. Also, lenders and borrowers are likely to have attorneys, while in other states real estate agents prepare the contracts and other work. And in general, the cost of doing business is higher in New York State, which has more mortgage regulation than many other places, he noted.

“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