What closing costs should I expect when buying a home in Texas? Closing costs in Texas typically run between 2% and 5% of the loan amount, covering lender fees, title insurance, appraisal, property tax prorations, and escrow setup — on a $350,000 home, that’s roughly $7,000 to $17,500 beyond your down payment.
Why Closing Costs Surprise So Many First-Time Buyers
Buyers often budget carefully for their down payment and then get caught off guard by closing costs — a separate set of fees due at closing that aren’t part of the purchase price itself. Knowing what’s included ahead of time means no last-minute scramble to come up with extra cash.
What’s Typically Included in Closing Costs
Lender fees — origination fees, underwriting fees, and application fees charged by your mortgage lender
Appraisal fee — required by your lender to confirm the home’s value supports the loan amount
Title insurance — protects you and your lender against title defects; in Texas, rates are set by the state and don’t vary between title companies
Property tax proration — you’ll typically reimburse the seller for property taxes they’ve already paid covering your ownership period, or vice versa depending on timing
Escrow account setup — an initial deposit into your escrow account to cover future property tax and insurance payments
Recording fees — charged by the county to officially record the property transfer
Survey fee — if a current survey isn’t available, you may need a new one, which is common practice in Texas real estate transactions
HOA transfer or resale fees — if the property is in an HOA, expect a transfer fee and possibly a resale certificate fee
Who Pays What in Texas
Closing costs are generally split between buyer and seller, though the exact split is negotiable:
Buyers typically cover their own lender fees, appraisal, and a portion of title insurance.
Sellers often cover the owner’s title policy and a portion of closing costs, depending on what’s negotiated in the contract.
In competitive markets, buyers sometimes ask sellers for a closing cost credit as part of their offer strategy.
How to Estimate Your Total
A simple starting estimate: budget 2–5% of your loan amount for closing costs, in addition to your down payment. Your lender is required to provide a Loan Estimate within three days of application, which breaks down these costs specifically for your loan — treat that as your real number rather than a generic percentage.
Ways to Reduce What You Pay at Closing
Ask the seller for a closing cost credit as part of your offer, especially if you’re offering close to asking price.
Compare Loan Estimates from multiple lenders — origination and underwriting fees vary more than buyers expect.
Check if you qualify for down payment assistance programs that also cover a portion of closing costs, such as TDHCA’s My First Texas Home program.
Ask about a rate lock or lender credit in exchange for a slightly higher interest rate if you’re short on cash at closing.
FAQ
Can closing costs be rolled into my mortgage? Generally, no — closing costs are typically due at closing separately from your loan, though some assistance programs and negotiated seller credits can offset what you pay out of pocket.
Are closing costs the same as my down payment? No — they’re separate. Your down payment goes toward the purchase price of the home, while closing costs cover fees for the loan, title work, and other transaction costs.
Can I negotiate who pays closing costs? Yes — the split between buyer and seller is negotiable and often becomes part of your offer strategy, especially if the seller is motivated.
Want a Clear Estimate for Your Purchase?
I can help you understand roughly what to expect for closing costs on a specific property and talk through strategies to reduce what you pay out of pocket. Call or text Ashley at 817-791-5574.
Ashley Galica, Realtor, DFW’s Finest Real Estate Group at ARC Realty DFW.
