What Closing Costs Look Like for Texas Buyers

Closing costs are the fees and prepaid items due at closing, separate from your down payment. Knowing what they include helps you plan your cash and spot where you can negotiate.

Common buyer closing costs

• Lender fees, like origination and underwriting
• Appraisal fee
• Credit report fee
• Prepaid interest from closing to the end of the month
• Initial escrow deposits for property taxes and homeowners insurance
• First year of homeowners insurance
• Title company escrow fee
• Lender's title insurance policy
• Survey, if a new one is needed
• Recording fees
• HOA transfer fees and resale certificate fees, if applicable

Who pays the owner's title policy?

In Texas, the contract says who pays for the owner's title insurance policy. It is often the seller, but it is negotiable.

How much to plan for

Your lender gives you a Loan Estimate early on that lists expected costs. Use it to plan, and expect the final Closing Disclosure a few days before closing.

Ways to lower your costs

• Compare Loan Estimates from more than one lender
• Ask the seller for a credit toward closing costs
• Ask about lender credits in exchange for a slightly higher rate
• Look into down payment and closing cost assistance programs if you qualify
• Reuse the seller's existing survey with a T47 affidavit if the lender and title company accept it

A note on prepaid items

A big chunk of what feels like closing costs is actually prepaid taxes and insurance going into your escrow account. It is not a fee, it is your money set aside to pay those bills.

When you get your Loan Estimate, send it my way and I'll help you make sense of it.