With the housing market varying so much across the country, many people assume that mortgage interest rates vary greatly from state-to-state as well. While there may be slight variations in mortgage interest rates, they are generally the same. Consequently, Hawaii mortgage rates are as competitive as those in any other state.

There can be, however, significant differences in closing costs and procedures across the nation. So, when you apply for your mortgage, don’t forget to factor in closing costs or your hard work to find a competitive Hawaii mortgage rate may be tempered by unforeseen closing costs.

What Closing Is

Before you try to discern the differences in closing costs, you must first understand what “closing” is. Closing is the final step before you take ownership of your home. During the closing, you will sign mortgage loan documents, transfer funds (escrow, insurance, etc…), and receive the deed to your property.

Closing Costs

Hawaii closing costs—at around $3628–are second only to New York as the highest in the nation. Typically, closing costs cover the following items:
o Lender Fee
o Title Insurance
o Title Search Fee
o State Mortgage Taxes
o Settlement Charge
o Escrow
o Settlement or Closing Fee
o Attorney’s Fee
o Flood Insurance Fee
o Home Warranty Fee
o Home Inspection Fee
o Survey Fee
o Notary Fee
o Recording Fee
o Interest
o Lender Fees/Charges

Closing in Hawaii

Closing procedures vary as much as closing costs. Whether you are a first-time homeowner—or a newcomer to Hawaii—knowing what to expect at closing will make the process much easier and less stressful.

In Hawaii—like New York—only attorneys may prepare property transfer documents. However, title companies and escrow companies my handle escrows and escrow instructions. Buyers and sellers split escrow fees. Sellers are responsible for the title search costs and the conveyance tax. Buyers pay title insurance premiums on both the owner’s and the lender’s policies.

No matter what state you buy your home in, having a general idea of the closing costs and procedures specific to your area will ensure that you are well prepared for the final step in purchasing your home. Remember, you spent a great deal of time finding the best mortgage rates in Hawaii. Don’t let unexpected closing costs ruin what can be a gratifying and rewarding experience—buying your home.