Closing Costs

When you buy a home in Texas, you will be responsible for paying closing costs. Closing costs are a one-time fee that is paid at the closing of the sale. They typically

 range from 2% to 4% of the purchase price of the home.

The specific closing costs that you will be responsible for will vary depending on the lender, the type of loan you choose, and the property itself. However, there are some common closing costs that all homebuyers in Texas will need to pay.

Common closing costs in Texas include:

Origination Fees

• Loan origination fee: This is a fee charged by the lender to process your loan application.
• Points: The fee for your interest rate listed as a percentage of your loan.
• Appraisal fee: This is a fee charged by an appraiser to determine the value of the property.
• Service fees: The cost of pulling credit, attorney fees, and fees your employer charges for verification of employment.

Title Fees

• Title insurance: This is insurance that protects you in case there are any title problems with the property.
• Recording fees: These are fees charged by the county to record the deed and mortgage.

Prepaid’s

• Prepaid interest: This is interest that is paid upfront on your mortgage.
• Homeowners insurance: This is insurance that protects your home from damage.
• Property taxes: These are taxes that are paid to the county on the value of your home.
• Escrow account: Usually 3 months of property taxes and 3 months of homeowners insurance.

Closing costs can be a significant expense, so it is important to factor them into your budget when you are buying a home. You can get an estimate of your closing costs from your lender.

Consult with your agent to determine whether or not there is room to negotiate with the seller for closing cost concessions. The seller may be willing to pay for some of your closing costs as a way to sweeten the deal.