RealEstateEconomyWatch.com

Though home prices are just drying off from a painful double dip earlier this year, closing costs are soaring.  Title and origination fees alone now cost 2 percent of the mortgage, an increase of 8.8 percent in just one year.

Bankrate’s annual survey of closing costs found that most of the rise in closing costs is tied to fees charged directly by lenders. On average, lenders charge about $1,614 in origination fees this year, up 10.3 percent from last year. Origination fees include lender charges for services such as underwriting and processing.

Bankrate’s survey does not include other closing costs for services that are either required or customary in most markets such as settlement fees, taxes, property insurance, recordation fees, inspection fees, association fees, interest and other prepaid items covered by a Good Faith Estimate.  Typically total closing costs run 5 percent or more of the cost of the transaction and may be rising.

In Bankrate’s limited survey, New York leads the nation with an average fee of $6,183. Texas, Utah, San Francisco and Idaho round out the five most expensive areas. Arkansas is the least expensive area, with an average fee of $3,378.

“Interest rates get a lot of attention, and rightfully so, but it’s also important for consumers to compare lender fees when shopping for a loan,” said Greg McBride, CFA, senior financial analyst for Bankrate, Inc.

Bankrate surveyed up to 10 lenders in each state in June 2011 and obtained online good faith estimates for a $200,000 mortgage to buy a single-family home with a 20 percent down payment. Costs include fees charged by lenders, as well as third-party fees for services such as appraisals and title insurance.