Average Closing Costs in Delaware

On average, Delaware homebuyers are charged $904 for lender fees and $924 for third-party fees, for total average closing costs of $1,828. This is below the national average of $1,847 and the 19th-lowest of all states. Lender practices vary in how closing costs are applied. However, on average, homebuyers pay $937 for loan origination fees, $675 for a lot survey, $823 for attorney fees, $415 for a home appraisal, $125 for a pest inspection, $100 for courier services and $75 for tax services. Title insurance is not included in these averages because it is calculated individually. Some homeowners can also expect to pay out of pocket for property taxes and homeowners' insurance. 

After more than a decade of boom and bust volatility, the Delaware housing market may be getting back to normal in 2016. Few states saw their housing markets rise as far and fast, and then crash further and faster, as Delaware. Although sales activity has been tepid since 2012, the median home value has been staging a gradual comeback, reaching $213,000 in May 2016, which is still more than 10% below its pre-2007 peak.

With its low state and property taxes, Delaware has been a magnet for retirees seeking tax relief from neighboring states. First-time homebuyers are experiencing normal housing costs by exercising patience in a tight market, as housing prices gradually increase. By comparison, Delaware’s closing costs could also be considered normal – not among the highest, but also not among the lowest, in the country. Still, Delaware homebuyers can expect to pay between 3 and 5% of their home’s value in closing costs, which can add thousands of dollars to the home purchase. 

What Goes Into Closing Costs in Delaware

Closing costs in Delaware can vary based on the lender and the loan product. However, there are several closing costs common to most home purchases.

Loan Origination Fee: For most home purchases involving a loan, the loan origination fee is the biggest cost, amounting to about 1% of the loan value. The fee, which is charged as points, with one point equaling 1%, covers many of the costs lenders incur in processing the loan through funding. Homebuyers can lower their loan interest rates by asking the lender to add points to their closing costs. For homebuyers who wish to minimize their out-of-pocket costs, points may be rolled into the loan.

Title Search and Insurance: The cost of a title search and title insurance is typically the next biggest cost. Lenders utilize a title company to perform a search of the property’s records to see if there are any outstanding claims or encumbrances. Buyers must then purchase a title insurance policy on the lender to protect its position as the first lien holder.

Home Appraisal: Before a lender approves the loan amount, it must determine, through an independent appraisal, if the property’s value can support the sale price, and that it is reasonable when compared with other properties that have recently been sold in the area.

Legal Fees: In Delaware, most of the legal aspects of settlement, including document review and filing, are handled by an attorney hired by the lender. Although homebuyers are not required to hire their own legal representation, they may do so at an additional expense.

Tax Services: Because mortgages are subordinate to tax liens in the event of a default, lenders may require a tax escrow account to be set up by the buyer. The lender monitors the account to ensure property tax payments are kept current.

Florida (FL): Average Closing Costs

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