Louisiana offers affordable homeownership and a broad array of living options. Newcomers to Louisiana can choose to live in a rural setting or a small town. Alternatively, they can install themselves in New Orleans, one of America's liveliest and most walkable cities. There is also Baton Rouge, which doubles as a college town and state capital, and offers a unique vibe. Perhaps most appealing of all, buying a home in Louisiana tends to cost less than a comparable home in most parts of the United States. The state's median home price of $154,000, as of 2016, sits well below the national median, which is fast approaching $200,000.

One consideration when buying a home in Louisiana is the closing costs involved in the transaction. Closing costs represent fees beyond the purchase price that a buyer must pay in a real estate transaction. Lenders and other third-party entities charge these fees in exchange for providing their services.

Average Closing Costs in Louisiana

On a $200,000 home purchase, a buyer in Louisiana can expect to pay $1,800 to $2,000 in closing costs. Total closing costs are often higher for a more expensive home and lower for a less expensive home. However, because some closing costs are fixed while others are variable, closing cost totals are not directly proportional to purchase price.

Compared to national averages, closing costs in Louisiana are right in line. In most states, average closing costs are somewhere between $1,800 and $2,000 for a $200,000 home purchase. Buyers in Louisiana also pay similar closing costs to residents of neighboring states, including Texas, Arkansas and Mississippi.

What Goes Into Closing Costs

Two broad categories comprise closing costs: lender costs and non-lender costs. Lender costs accrue to the bank or mortgage company providing the funds at closing. Non-lender costs get paid to a host of third-party entities involved in the transaction, such as the closing attorney, title company, home appraiser and home inspector.

Lender Closing Costs

The biggest lender closing cost in Louisiana is the origination fee. This fee represents the lender's charge for doing business. It is usually expressed as a flat percentage of the loan amount. As of 2016, this percentage usually equals 1% or less, though in the wake of the 2008 meltdown, mortgage companies, in particular those in the subprime arena, received heaps of bad press for charging low-credit borrowers origination fees of 4 or 5% or more.

A document preparation fee and a tax service fee make up the remainder of lender closing costs. Neither fee should amount to more than $100.

Non-lender Closing Costs

Non-lender closing costs in Louisiana can vary more than lender fees, based on the nature of the transaction. The following fees represent the most common non-lender closing costs, though not all get charged on every transaction.

Some lenders require a property survey. Even when it is not required, borrowers often choose to have a survey done for their own protection. A licensed property surveyor comes to the property and determines the exact property lines. The fee for this service can vary based on the size of the property, but it averages $500 in Louisiana.

The settlement fee, required on nearly all transactions, typically represents the second-largest non-lender closing cost in Louisiana. This fee compensates the closing attorney or title company representative who executes the transaction by transferring the title from seller to buyer. In Louisiana, a typical settlement fee ranges from $450 to $500.

Because lenders want to be sure they are not lending more money than a home is actually worth, nearly all lenders require a home appraisal as a condition of loan approval. The cost varies based on several factors, including location, size of property and number of recent, comparable sales. A range of $400 to $500 is a typical cost for a home appraisal in Louisiana. Most lenders also require a home inspection to check for structural integrity and the presence of termites and other pests. This service is much less costly, usually ranging from $100 to $150.

The remaining non-lender fees, such as the courier fee, credit report fee and flood certification fee, range from $10 to $100 each.

Maryland (MD): Average Closing Costs

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