Average Closing Costs in Vermont

The following average closing costs are based on a house selling for $200,000 with a 20% down payment. In Vermont, homebuyers pay an average of $1,074 in origination fees and $862 in third-party fees for a total average of $1,936 in closing costs. That is among the highest in the nation, which averages $1,847. Hawaii, Connecticut and New Jersey have the highest closing costs with more than $2,000 each.

Breaking down the individual costs involved shows homebuyers paying an average of $1,124 for origination fees, $460 for an appraisal, $616 for settlement costs, $21 for a credit report, $10 for flood certification, $125 for a pest inspection, $100 for courier services and $550 for a survey. These average closing costs do not include title insurance, because lenders have difficulty estimating average title insurance costs, which can add more than $1,000 to the total costs.

Starting with the housing boom in the 1980s, and again in the early 2000s, the housing market in Vermont has been one of the more robust markets in the country. Between 2000 and 2007, home prices rose by 83%. However, since the bust that occurred in 2008, Vermont’s housing recovery has underperformed the rest of the country. As of May 16, 2016, the median home value was still nearly 15% below the pre-housing bubble peak. Changing demographics and declining population growth have led to a weakening housing market since 2014. That can be good for first-time homebuyers looking to buy a home below peak prices. Unfortunately, homebuyers in Vermont must be ready to pay some of the highest closing costs in the country. Closing costs amount to between 3 and 5% of the home’s value, but Vermont homebuyers pay a little more than most of the nation for certain costs. Closing costs do vary throughout the state, so it helps to know the average closing costs paid by homebuyers in Vermont.

What Goes Into Closing Costs

Closing costs in Vermont can vary based on the lender, the property being acquired and the amount of the loan and down payment. However, these are the more common closing costs that appear on the good faith estimate provided by the lender.

Loan origination fees: This all-inclusive fee covers a range of services performed by the lender, including processing, underwriting, document preparation and funding for the loan. The fee is calculated as a percentage of the home’s value, typically 1%, and stated as “points”, with 1% equaling one point. Homebuyers who wish to lower their interest costs can do so by asking the lender to add more points to the closing costs. Conversely, to reduce out-of-pocket costs at closing, a homebuyer could ask the lender to roll the origination fee into the loan.

Appraisal fee: An appraisal is ordered by the lender to verify that the property value is reasonable based on the home’s sale price and the sale price of comparable homes in the area.

Settlement/Closing costs: In Vermont, the title company handles all of the legal aspects of closing the sale, including preparing the HUD-1 settlement statement and overseeing the proper execution of all required documents. Homebuyers can hire their own attorneys to review the settlement at an additional cost.

Title Insurance: Buyers are required to purchase title insurance for the lender to protect against any defects in the title. Sellers are required to buy title insurance on the buyer to guarantee a clear title.

Survey: On some types of properties, the lender may order a survey to confirm the property lines. This is for the protection of both the lender and the buyer.

Tax service: In case of a default, property tax liens usually take precedence over the lender as a lien holder. Depending on the amount of the loan, the lender may require that a tax impound account be established, which is monitored by the lender to ensure payments are kept current.

Illinois (IL): Average Closing Costs

Related Articles
  1. Personal Finance

    Mortgage Fees That Can Trash Your Refinance Deal

    Before deciding that refinancing your mortgage at a lower interest rate is a good deal, factor all the fees into your calculations.
  2. Personal Finance

    Watch Out for "Junk" Mortgage Fees

    So many fees are tacked onto a mortgage, that it's easy to pay more than you have to.
  3. Investing

    Can I Afford a House in 2016?

    Start the homebuying process in 2016 before mortgage rates increase. More sellers are expected to list their homes, resulting in less competition for buyers.
  4. Investing

    Special Benefits for First-Time Homebuyers

    To encourage Americans to buy their first homes, the government offers credits and tax breaks. Here's the lowdown on who can qualify for each benefit.
  5. Personal Finance

    Understanding Your Mortgage

    We walk through the steps needed to secure the best loan to finance the purchase of your home.
  6. Investing

    First-Time Homebuyer's Guide

    Buying a home for the first time can seem daunting. Learn the buying process & what to watch out for in order to be a successful first time home buyer.
  7. Personal Finance

    10 Frustrating Things Standing Between You and Your Mortgage

    If you know about the common challenges ahead of time, you can be prepared for them, and in some cases, even avoid them.
  8. Investing

    Understanding The Escrow Process

    Learn the 10 steps that lead up to closing the deal on your new home and taking possession.
  9. Retirement

    When Are Mortgage Lenders Better Than Banks?

    Individuals seeking a mortgage loan should consider factors or circumstances that may make a mortgage lender a better choice than a traditional bank.
  10. Personal Finance

    How to Sell a Car With a Lien

    Vehicle owners wondering how to sell a car with a lien on the certificate of title have four options to both remove the lien holder and transfer ownership.
Frequently Asked Questions
  1. Why would a company issue preference shares instead of common shares?

    Learn about some reasons corporations might issue preference shares and why investors might value them more than common shares.
  2. What are the Advantages of Ordinary Shares?

    Dividends and ownership rights are two advantages of investing in ordinary shares.
  3. What is real estate underwriting?

    See how underwriters for major lenders scrutinize real estate loans and manage their risk, and learn the origin of the term ...
  4. How Do Speculators Profit From Options?

    Options are a risky game, but you can learn speculators' tricks to use them to your advantage.
Trading Center