Mortgage loan closing costs in Wisconsin are some of the lowest in the U.S., according to a new report from New York-based consumer financial services company Bankrate Inc.
Say a person is buying a $200,000 house. In Wisconsin, the closing costs on the mortgage loan would average $1,863, while in Hawaii, the same transaction would produce $2,655 in closing costs, on average.
Wisconsin’s closing costs, modeled for the city of Milwaukee, included $1,010 in origination fees charged by lenders and $853 in third-party fees such as an appraisal, a survey and an attorney.
"Wisconsin is a head scratcher for me,” said Holden Lewis, senior mortgage analyst at Bankrate.com. "In our survey, the third party fees were unusually low in Wisconsin and I just don’t know why. We surveyed Milwaukee and from what I understand, in Milwaukee, attorneys conduct closing, so generally you would expect those fees to be higher than average.
"It was close to the bottom last year, too, so I guess it’s just a fairly inexpensive state.”
Wisconsin ranked 12th lowest in Bankrate's 2015 survey of closing costs.
Only Pennsylvania has lower average closing costs than Wisconsin in this year's survey, at $1,837 on a $200,000 loan. Also in the bottom five are Kentucky, South Dakota and Oklahoma.
Besides Hawaii, the other top five are New York, North Carolina, Delaware and South Carolina.
Nationally, closing costs average $2,128.
The report was produced by surveying up to 10 lenders in each of the 50 states and Washington, D.C. in June, getting online estimates for a $200,000 mortgage to buy a single family home with a 20 percent down payment.
Closing costs included lender fees and third-party fees for services such as appraisals. Excluded were highly variable costs like discount points, taxes, title fees, property insurance, association fees, interest and other prepaid items.
"The main message that is conveyed is that the closing costs vary a lot from lender to lender, more than they do from state to state,” Lewis said. "It’s really valuable to apply at at least two lenders and get those loan estimates and compare them side-by-side because you might find that one lender costs hundreds of dollars less than the other lender.”