Don’t Forget the Closing Costs

Surprisingly, the price of a home may not reflect the amount of its closing costs, according to a survey by SmartAsset.

According to AJ Smith, managing editor of SmartAsset, the national average of a home closing costs is 2.2%, based on a 30-year, fixed-rate mortgage. “It’s not exact, but it can be used as a yardstick,” she tells PLANADVISER. “A lot of the nation is right around that 2.2%, but then a few were quite a bit less.”  

And some were quite a bit more, SmartAsset found. Buying a home is one of the biggest financial decisions people make, Smith says, and people don’t always consider closing costs when they try to calculate whether they can afford a home, or when they weigh renting versus buying. “Closing costs can sneak up on people,” she says, “and it’s usually not a small number. We wanted to show people what they can expect to pay, and also look at how counties differ.”

Hamilton, Indiana, takes top place for the lowest closing cost—at an average of $3,045. The median home value is $214,400, and the closing cost expressed as a percentage of the home’s value is 1.4%.

Quite a contrast is Kent, Delaware, with the highest closing cost: $9,634. Home value in Kent is $205,100, generating a closing cost of 4.7%.

Overall, Indiana took five places out of ten for lowest closing costs in counties nationwide, followed by Iowa, which has four. Perhaps unsurprisingly, six counties in New York have the highest closing costs—but only one is in New York City. Think it’s Manhattan? Guess again. Closing costs in the Bronx, where the median home value is $99,300, average $3,816. As Smith points out, the cost is somewhat unpredictable: “It’s good to keep it in mind as a number to think about,” she says.

All home prices in the lists are median home values, and the closing cost is expressed as a percentage of that valuation. The top ten highest closing costs in counties throughout the U.S. are:

1. Kent, Delaware: $9,634 based on a median home value of $205,100 (4.7%)
2. Sussex, Delaware: $11,278,based on $241,800 (4.66%)
3. New Castle, Delaware: $11,699, based on $251,200 (4.65%)
4. Washington, DC: $18,124 based on $443,000 (4.1%)
5. Cattaraugus, New York: $3,059 based on $79,600 (3.84%)
6. Steuben, New York: $3,274 based on $85,200 (3.84%)
7. Chautauqua, New York: $3,154 based on $82,100 (3.84%)
8. Wyoming, New York: $3.816 based on $99,300 (3.84%)
9. Bronx, New York: $14,591 based on $380,900 (3.83%)
10. Armstrong, New York: $3,513 based on $92,300 (3.8%)

Using home prices as median home values, with the closing cost expressed as a percentage of the home value, the top ten lowest closing costs in counties in the U.S. are:

1. Hamilton, Indiana: $3,045 based on a median home value of $214,400 (1.4%)
2. Johnson, Iowa: $2,632 based on $183,100 (1.4%)
3. Dallas, Iowa: $2,627 based on $182,700 (1.4%)
4. Boone, Indiana: $2,638 based on $182,300 (1.4%)
5. Teton, Wyoming: $10,057 based on $692,700 (1.5%)
6. Porter, Indiana: $2,442 based on $166,600 (1.5%)
7. Dearborn, Indiana: $2,381 based on $161,700 (1.5%)
8. Hendricks, Indiana: $2,378 based on $161,500 (1.5%)
9. Story, Iowa: $2,370 based on $160,700 (1.5%)
10. Madison, Iowa: $2,357 based on $159,600 (1.5%)