The average closing costs for a refinance mortgage in the U.S. totaled $2,403 last year, or about 0.72% of the loan amount, according to a new report from LodeStar Software Solutions.
The findings mark the company’s first analysis of refinance-specific closing costs. Closing fees ranged widely by location and are influenced largely by state and local taxes.
New York topped the list with closing costs averaging 2.1% of the loan amount — nearly three times the national average. Average costs in the state came in at $6,565.
Washington, D.C., recorded the highest average closing cost of $6,773, albeit with a lower percentage of the average loan amount (1.19%).
In contrast, California, Utah and Maine recorded the lowest percentages at 0.33%, 0.40% and 0.44%, respectively. Total closing costs in California averaged $1,746, with Utah at $1,933 and Maine at $1,424.
Missouri ($1,196) reported the lowest average closing costs of any state, totaling 0.45% of the average loan amount.
The study found that jurisdictions without mortgage, recording or intangible taxes tend to have lower closing costs. Those with these taxes — such as Washington, D.C., New York, Florida, Maryland and Pennsylvania — had some of the highest costs.
“The effect of recordation taxes and fees on the total closing costs as a percentage of the refinance loan amount is notable,” said Ron Carvalho, director of data operations at LodeStar.
“Texas, which has no transfer taxes but holds the sixth highest total closing cost as a percentage of refinance loan amount, is an outlier. Virginia and New Jersey, which both have transfer taxes, hold eighth and ninth places, respectively.
A 10% reduction in title insurance premiums — a key component of typical closing costs — was recently ordered by the Texas Department of Insurance (TDI), with the regulator citing profit ratios that were deemed to be excessive. The mandate is set to go into effect July 1.
“Hawaii, in seventh place, does have transfer tax, but that tax is seller paid and only on deeds,” Carvalho added. “The amount in that state is surprisingly high in this case, since there are no mortgage taxes due for refinances.”
Nationally, the average refinance loan amount in 2024 was $339,579, with a median of $327,124. Median closing costs — including taxes and recording fees — totaled $2,056. When excluding these taxes and fees, the median amount was $1,802.
Homebuyers paid an average of $4,661 in closing costs for purchase mortgages last year, according to LodeStar data released in April.
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