Overall closing costs rose at a slow pace, albeit still significant at a 6 percent increase.
Chicago, IL (PRWEB) August 14, 2013
The Federal Savings Bank has been encouraging prospective applicants to obtain a mortgage due to currently low rates. However, some potential lien holders are weary of recent data suggesting that closing costs on mortgages have risen slightly during the past year.
Bankrate recently released its annual closing cost survey, indicating an upward trend among origination fees and closing costs. When isolating loan origination costs, Bankrate found this figure rose 8.4 percent compared to the previous year. Overall closing costs rose at a slow pace, albeit still significant at a 6 percent increase.
"Banks realize that rates are going to go up and are trying to capture fees early on," Anthony Sanders, professor of real estate and finance at George Mason University, told Bankrate. "They know when rates go up, loan applications plunge, so they are trying to generate more earnings on anticipation of lower application volume and lower profits. ... They will have to lower the closing costs where it's possible to attract more business."
When using the national average, a homebuyer would pay an estimated $2,400 in closing costs (including third-party fees) for a standard mortgage loan of $200,000. That figure has increased by $136 from last year. However, some mortgage professionals think finding a low-cost mortgage is possible if homebuyers shop around and approach a number of lenders.
Contact The Federal Savings Bank today to discuss your mortgage financing needs as well as your first-time home buyer program eligibility.