Costs Associated With Buying A Home Are Rising
STEVE INSKEEP, host:
Let's look a little more closely now at what's happening in the housing market. Suppose you were lucky enough to get a loan from a bank, and you get a good deal on your new house. There are still closing costs on top of the sale price: inspection fees, title costs, dozens of other items which can add thousands of dollars to the price of a house or a condo.
A new survey by Bankrate.com says those costs are rising fast.
Here's NPR's Jim Zarroli.
JIM ZARROLI: The survey says the average closing costs for a mortgage - costs like title insurance and building inspection fees - have risen from about $2,700 to more than $3,700 over the past year. New York, Texas and California have the highest fees; and Arkansas, the lowest. Bankrate's Holden Lewis says the increase is partly caused by new regulations imposed on lenders by the mortgage giants Fannie Mae and Freddie Mac.
Mr. HOLDEN LEWIS (Journalist, Bankrate.com): Lenders hire someone to check to make sure that you have a job. Lenders have to conduct at least two credit checks nowadays: once when you apply, and right before closing. All of these things are applying, basically, to every new loan, and so their costs have gone up.
ZARROLI: Lewis says the jump in closing costs may not be as big as the survey suggests. In the past, lenders often low-balled estimated costs before the closing date. But new regulations put in place by the Bush administration required lenders to give a more accurate estimate, and that's reflected in the survey. But Lewis says there is no question that actual costs have gone up, as well.
Jim Zarroli, NPR News, New York.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.