Home Buyer’s Guide To Closing Costs In Texas

What Are Closing Costs?

Closing costs are the processing fees you pay to your mortgage lender when you close on your loan. If you’re putting together all of the costs and fees when buying a home using loans or any other types of financing, you’re probably unsure what all is included in closing costs. These closing costs will range from 3% to 6% of the price of your mortgage loan amount. If you buy a $100,000 home with 10 percent down ($10,000) and your closing fees equal 3 percent of the purchase price ($5,000), you’ll be expected to pay an additional $1,500 out-of-pocket at closing. None of these costs can be transferred into the monthly mortgage payment. You’ll most likely have to pay with a check at closing.

How Much Are Closing Costs In Texas?

Closing costs in Texas are not cheap. It’s usually around $3,000 for a home loan of $200,00 according to ClosingCorp, which provides research on U.S. real estate. That number makes up about 1.5 percent of the home’s price tag. Although, the data excludes 2 key expenses: loan origination fees, which is the case most of the time, and private mortgage insurance if you’re not applying a 20 percent down payment. Both of these are going to add thousands to your closing costs.

Common Closing Costs

First things first, loan organization fees. These are charges due to the lender or bank after the creation of a new loan. Most of the time these fees will cost about 1% of the cost of your mortgage. Title Insurance is another cost you’ll need to think about. This is a type of indemnity insurance offered by title companies that insure against losses resulting from defects in the title, such as liens, outstanding taxes, mortgages, and violations belonging to previous owners. Other fees you might need to take care of on the mortgage side are credit report fees and escrow fees.

Another common cost you will run into is appraisal fees. This cost will go toward paying a professional appraiser to assess the home’s value. Appraisal fees will range anywhere between $250 to $500 depending on the size, location, and property type. Surveys also need to come out and show the property’s exact boundary, location, and legal description. This will run you anywhere between $300-$700. A home inspection will also need to be conducted before moving into your home, ranging from $300 to $600 in Texas.

If you have any questions or want a full breakdown of what you can expect regarding closing costs or the home buying process reach out to us at [email protected].