Mortgage closing costs in the U.S. declined in the past year as lenders competed to attract qualified borrowers, Bankrate Inc. said.

Origination and title costs on a $200,000 home loan average $3,754 nationwide, down 7.4 percent from 2011, according to Bankrate’s annual survey of lenders, conducted in June. New York State has the highest closing costs for the third straight year, with an average of $5,435, a 12 percent drop from last year, the North Palm Beach, Florida-based financial data provider said.

Stricter lending standards are shrinking the pool of Americans who can obtain a mortgage and forcing banks to vie for customers with good credit, said Greg McBride, senior financial analyst at Bankrate. Borrowers should seek three estimates to take advantage of competing prices, he said.

“Zero in on the fees that the lenders themselves are charging,” McBride said. “Base your comparison on that.”

Origination fees, charged directly by the lender, fell 1 percent, while title and closing costs dropped almost 12 percent, Bankrate said.

Texas is the second-priciest state in the U.S. in which to close a mortgage. Costs there average $4,619, a 6.6 percent decline from last year. Pennsylvania was third, at $4,467.

Lowest Costs

The cheapest places for closing costs are Missouri, Kansas and Colorado, according to Bankrate. Missouri fees total $3,006, with Kansas at $3,193 and Colorado at $3,199.

Closing costs include fees charged by lenders, as well as third-party charges for services such as appraisals and title insurance. The survey excludes taxes, property insurance, association fees, interest and other prepaid items.

Bankrate surveyed as many as 10 lenders in each state and the District of Columbia in June and obtained estimates for a borrower with excellent credit to take out a $200,000 mortgage on a single-family home with a 20 percent down payment. The good-faith estimates weren’t necessarily what borrowers actually paid when their loans closed.