These days, many new homeowners are doling out thousands of dollars for closing fees.
According to a recent survey by Bankrate.com, Massachusetts ranks number 13 in the nation for the highest mortgage closing costs. In addition, the August survey found that closing costs in the United States jumped 36 percent over last year’s fees, largely due to the increase in federal regulations since the mortgage meltdown.
“Closing costs have gotten higher because the process has become more intense and more costly for a lender,” explains Amy Tierce, a branch manager of Fairway Independent Mortgage in Needham, and board member of the Massachusetts Mortgage Bankers Association. “Back in 2003, if you had a pulse and a pay stub you could get a mortgage. I say to clients now, ‘However great it was when you did this before, is how torturous it is going to be today.’ There is not a paper we don’t ask you for.”
There are more fraud protection steps required and more detailed appraisals, explains Tierce. And with more paperwork, there is more labor, which also drives up prices.