Buying a home in Mississippi offers several advantages. For starters, prices related to buying a home are low compared to most of the country. The median home value in the United States, as of 2016, is over $180,000, while the median sales price in Mississippi hovers below $130,000. Housing is not the only area where one saves money by living in Mississippi. All told, the state's cost of living is 10% lower than the national average. Mississippi offers diverse scenery, from rural living in the Delta, to city life in Jackson, to a lively beach scene in Gulfport and Biloxi. Before closing on a home in Mississippi, it is best to understand the closing costs most often required in a real estate transaction in the state.

Average Closing Costs in Mississippi

In Mississippi, a buyer should expect total closing costs between 0.9 and 1% of the purchase amount. For a $200,000 home purchase, expected closing costs range from $1,800 to $2,000. In most cases, at least half of the closing costs in a Mississippi real estate transaction accrue to the mortgage lender. The remainder get paid to a host of third-party entities, such as the survey company, closing attorney or title company representative, home appraiser, home inspector, courier company and the credit reporting bureaus. Cash buyers can save a lot of money on closing costs, since no mortgage company is involved in the transaction. Closing costs in Mississippi are right in line with the national average. Moreover, they are similar to the average closing costs in neighboring states, such as Alabama, Arkansas and Louisiana.

What Goes Into Closing Costs

Two categories comprise closing costs in Mississippi: lender fees and non-lender fees. Lender fees get paid to the lender providing the purchase funds at closing, such as a bank or mortgage company. The biggest lender fee is the origination fee. This is the fee a lender charges for its services, and represents the primary way mortgage lenders make money. A standard origination fee in Mississippi equals 0.5% of the loan amount. Therefore, the larger the down payment a buyer puts toward a home purchase, the smaller the origination fee. Additional lender fees include a tax service charge and a document preparation fee. These charges usually come to less than $100 each.

Apart from lender fees, several additional fees get paid at the closing table to various third-party entities. The largest in Mississippi, when applicable, is the survey fee, which averages $750. This fee pays for a property surveyor to evaluate the home and lot and determine exactly where the property lines lie. Some buyers have a property survey done because their lender requires it, while others get one for their own protection and peace of mind. Others, particularly cash buyers, see no need for a survey and therefore do not pay this fee.

The settlement fee usually represents the second-largest non-lender closing cost in Mississippi. Averaging $550, this fee gets paid to the closing attorney or title insurance company representative responsible for executing the closing and transferring the property title from seller to buyer. This fee applies to nearly every real estate transaction, regardless if the buyer is paying cash or taking out a mortgage.

A home appraisal, which depending on the size and location of the home, can range from $300 to more than $500 in Mississippi, pays for an appraiser to come to the home and estimate its value based on condition, location and recent comparable sales in the area. Most lenders require a home appraisal to ensure the home's market value supports the amount they are lending.

Usually, lenders also require a home inspection. A home inspector evaluates a home's structural integrity and certifies that it is free of pests, such as termites. Even if not required, a home inspection is a good idea and well worth the modest cost, which usually ranges from $100 to $150.

Additional non-lender fees a buyer may be charged include a courier fee, usually around $100, and a credit report fee, which averages $20 for each of the three major credit reporting agencies. Depending on a home's location, a flood certification fee, usually $25 or less, may be required.

North Carolina (NC): Average Closing Costs

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