Average Closing Costs in Illinois

Closing costs can vary substantially, depending on the mortgage lender, the loan amount, the property and the location. However, based on a hypothetical transaction, including a 20% down payment and a $200,000 home loan, average costs associated with closing a home sale in Illinois come to $1,847, right in line with the overall national average. Loan origination fees in the state average $1,080, with other common third-party fees running to $767.

Breaking down costs even further, the average homebuyer in Illinois pays $525 for a property survey, $513 for settlement fees, $412 for a property appraisal and $125 for a home inspection. Other common costs include $80 for document preparation, $100 for postage and courier service, $80 for tax services, $10 for flood certification and $21 for a credit report. Some highly variable costs are not included in state averages, including real estate transfer taxes, homeowner's insurance, title insurance and homeowners' association fees.

While closing costs in Illinois match the nationwide average, the state comes in higher than all of its neighbors except Iowa. Wisconsin, with an average of $1,770, is home to the cheapest closing costs among states bordering Illinois. Iowa closing costs are $1,923. Nationwide, Ohio has the lowest average closing costs at $1,613. Hawaii is home to the nation's highest closing costs at $2,163, followed by Idaho at $1,682. 

The Illinois housing market entered its fifth consecutive year of price growth in 2016, which was a welcome rebound after a long period of falling prices triggered by the financial crisis of 2007-08. The median price for residential property in the state rose to $172,000 by the end of March 2016, up 4.3% compared to the prior year. While the price level is still more than 10% below pre-crisis levels, upward price momentum is expected to continue, as sales volumes trend higher and statewide housing inventories fall. Since higher home prices generally means higher closing costs, Illinois homebuyers have extra incentive to analyze these expenses.

How Closing Costs in Illinois Are Determined

Loan Origination Fee: Lenders charge an origination fee for processing and funding a real estate loan. The fee is generally quoted as a fixed percentage of the full loan amount. The fee may be negotiable, depending on the transaction details and general market conditions.

Appraisal Fee: Lenders require a property appraisal to ensure that the actual value of the home corresponds to the agreed purchase price. In Illinois, the lender generally selects the appraiser and oversees the appraisal process.

Survey Fee: A property survey may be required to confirm the boundaries of a property and locate setback lines and easements.

Title Insurance: In Illinois, mortgage lenders generally require homebuyers to pay for an insurance policy that protects the interests of the lender should a previously unidentified encumbrance be found, such as a lien or a judgment. It is also common in Illinois for the seller to purchase a title insurance policy that protects the interests of the homebuyer, but this is not a legal requirement.

Settlement Fee: Homebuyers in Illinois typically pay a settlement fee to a closing agent to handle the final transaction settlement process. Closing agents are often employees of the title insurance company involved in the transaction. Some homebuyers also hire a real estate attorney for representation during the settlement process.

Mortgage Insurance: Homebuyers who make a down payment of less than 20% are typically required to purchase private mortgage insurance for protection of the lender.

Home Inspection Fee: In Illinois, home sellers are required to provide buyers with a written disclosure concerning any defects or safety issues that the seller is aware of in the home. While some lenders may require a separate professional home inspection, this service is often optional for the homebuyer. A home inspection is generally recommended, however, as it alerts the homebuyer to problems that may otherwise go unnoticed prior to the closing of a sale.

Indiana (IN): Average Closing Costs

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