Average Closing Costs in Wisconsin

Based on a home valued at $200,000 with a 20% down payment, origination fees charged by Wisconsin lenders are $1,047 and third parties involved in the transaction charge $723, for total average closing costs of $1,770. That is well below the national average of $1,847. However, with a median sale price of $155,000, homebuyers in Wisconsin can still buy a lot of house when it becomes available. Working in their favor are average closing costs that are among the lowest in the nation. Wisconsin homebuyers can expect to pay between 3 and 5% of the home's value in closing costs, but it helps to know the average closing costs in the state.

The average cost for document preparation is $80. Origination fees average $1,095, and tax services are $76. The average third-party fee for an appraisal is $423. Settlement costs are $388, and the cost of a survey averages $500. Title insurance fees are not included in these averages because lenders have difficulty in estimating them, but they can add as much as $1,000 to the total closing costs. Homebuyers must also fund impound accounts for property taxes and homeowners' insurance. 

Thanks to a mild Wisconsin winter, home sales activity in the first quarter of 2016 was off to its strongest start since 2007. That bodes well for a state that has experienced a gradual recovery with housing prices finally reaching their pre-housing bubble peak in 2015. The unexpected surge in sales activity produced a shortage of inventory, which should continue to push prices higher in 2016.

What Goes Into Closing Costs

In Wisconsin, closing costs can vary based on the lender, the type and amount of the loan, and the size and type of property. The following closing costs are what most homebuyers can expect to see on a good-faith estimate provided by the lender.

Loan origination fee: The loan origination fee is often quoted in points, with one point representing 1% of the loan. Points cover the costs of processing the loan. Buyers can sometimes lower their interest rates by paying additional points. Additional points are added to closing costs as discount points.

Appraisal fee: Lenders order an appraisal to verify that the value of the home is worth at least the sales price and is justified based on recent sales of comparable homes.

Tax service fee: Because mortgage loans are subordinate to property tax liens, lenders pay an independent tax service to monitor property tax payments to ensure they are current.

Closing or settlement fee: This fee covers the legal aspects of closing escrow, which are typically handled by the title company.

Title insurance: Lenders require title insurance to ensure there are no title defects that would threaten their first positions as lien holders. Sellers buy title insurance for the buyers to guarantee clear titles to the properties upon closing.

Home inspection: Some lenders require a pest inspection if any issues arise in the home appraisal. If a homebuyer wants a home inspection, it is his responsibility to cover the cost. It can be paid as part of the closing costs, but it is not included in the good-faith estimate.

Survey: Depending on the type of property and its location, some lenders require surveys to verify the integrity of the property lines. This is done to protect the lender and the buyer.

Alabama (AL): Average Closing Costs

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