According to CNN, the new federal regulations which require lenders to be more accurate when estimating closing costs seem to be decreasing mortgage costs, the amount new home buyers are paying at closing.  The average cost of closing on a mortgage has fallen by 7.4% over the past year, according to a recent survey by Bankrate.com. Closing costs include loan origination fees like application fees and credit check and third party fees such at title searches and insurance.  The regulation, which was put in place two years ago as part of the Real Estate Settlement Practices Act requires lenders to provide a “good faith estimate” of third-party fees that is within 10% of the actual amount the buyer will pay. It appears that the biggest drop is in the third party fees.  Closing costs vary from state to state and within states even down to different neighborhoods.