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The 10 most expensive states for obtaining a mortgage

When seeking a mortgage, everyone knows to hunt for the best rate, but some states just have the odds stacked against them.

We all know that mortgage rates remain low, and the mantra of “buy now” holds true in most states, but obtaining a good mortgage rate is easier in some states than others. GObankingrates.com studied local rates offered on 15- and 30-year fixed-rate mortgages (FRM), weighted with the average home listing price in each state.

So where is the cheapest places to get a mortgage loan? Mississippi, Iowa, and Ohio top the list as the best rates around, but where are the highest rates?

Ten most expensive states for obtaining a mortgage

10. Texas – usually on every “best of” list, this state lands itself in this top 10 of shame, but not because the BBQ sucks, but because the average listing goes for $370,678 which is over the national median. The state’s average 30-year mortgage rate (3.779%) is the fourth-worst in the nation, and its average 15-year mortgage rate is the fifth-worst at 3.063%.

9. Florida – the study notes that although its average 15-year mortgage rate is one of the lowest of all 50 states at 3.023%, its average 30-year mortgage rate is the absolute worst in America (3.789%). Interesting tradeoff, no?

8. Rhode Island – “With a middling 30-year mortgage rate and worse-than-average 15-year mortgage rate, Rhode Island residents might have a harder time tracking down a good deal on a mortgage,” states the report. “The high average home price in the state, $445,822, also works against local home buyers.”

7. Massachusetts – despite a low average 15-year mortgage rate (3.083%), the state has one of the highest 30-year FRMs (3.780%), paired with above-median average home prices, and you’ve got an expensive scenario.

6. Utah – Although this state’s 15-year FRM is in line with the national average, the 30-year is a different story and is the second-highest in America at 3.783%. The average home listing price is $555,247, far above the national median.

5. Colorado – one of the strongest real estate markets in the nation, this state is on the list not because of their mortgage rates (which are roughly in line with the national average), but because the average listing price is an astonishing $622,094. Wow.

4. Connecticut – home of the highest 15-year FRM (3.069%), and one of the worst 30-year mortgage rate (3.774%). Combined with an average listing price of $592,603 and this is one state where residents will feel the pinch.

3. New York – you already knew this state would make this list, with an average listing price of $782,672 that doesn’t quite offset the decent mortgage rates that hover around the national average.

2. California – Like NY, the high average listing price ($819,518) puts this state smack dab in the middle of this list, and the higher than average mortgage rates squeeze the locals.

1. Hawaii – the crown jewel of the Americas, Hawaii is one of the most expensive places to live with an average listing price of $1M. The report indicates that Hawaii actually has a decent average 15-year mortgage rate at 3.031% APR, but this isn’t enough to outweigh the state’s listing prices. “The middling average rate of 3.768% would result in a staggering $4,731 monthly mortgage payment for the average home listing price.”

The list should probably have simply been called “if you live in a state with high property values, you’re going to pay more,” or “The Top 10 Most Expensive Real Estate Markets in America,” but you get the gist.

When a property costs a million dollars, a slightly higher interest rate can mean thousands of dollars tacked on to the price of the home. Some of the states are surprises (Texas and Utah, for example), but others are obvious members of the “super expensive” club (Hawaii, California).

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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