Average closing costs increased to $3,118 in 2008 from $2,736 to 2007. That's a 14 percent rise, according to Bankrate.com.

Which state has the highest closing costs? New York. And New York City has the highest rates of any locality in the country, with $4,016 average costs.

The other top 5 are:

Texas

Buffalo, NY

Miami

Oklahoma

North Carolinians pay the lowest average closing costs at $2,650.

Part of the reason that NY has such high closing costs is that there are multiple attorneys involved representing the buyer, the seller and the lender, according to Bankrate. Title insurance costs are higher in NY as well.

Bankrate’s Closing Cost study was conducted in June and July of 2008 by obtaining four to nine good faith estimates from the Web sites of online lenders. Researchers picked a ZIP code in some of the largest cities in each state and requested information on the closing costs for at $200,000 loan. They requested fees on a 30-year, fixed-rate mortgage for a borrower with a 20 percent down payment and good credit to buy a single-family house. Bankrate's survey includes lenders' origination fees and title and settlement fees, and not taxes or prepaid items.

If you're buying a home make sure you understand the fees before you go into your closing. You don't want to be one of the buyers who has to cough up extra cash at the last minute.

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