How Much are Closing Costs when Buying a Home in Texas?

Calculating your closing costs when buying a home in Texas is going to be dependent upon which type of loan you receive.  The closing costs will also be significantly less when paying cash for a house versus obtaining a mortgage.  Typically, when obtaining a mortgage the closing costs range between 2% to 6% and are typically around the 4% range.  These costs will be disclosed on the Closing Disclosure presented by your lender with the break down of each fee.

In Texas we use Title Companies to handle the process of closing real estate transactions.  This process is referred to as escrow.  The title company researches the transfer of ownership of the property back to the original land grants and ensures that when you buy a home, you indeed have ownership with no one able to come back and claim that they really own the property.  A title policy is basically insurance guaranteeing the title company did their job and that there are no clouds on the title obscuring ownership.

Many things are included in closing costs when buying a house.  Lenders many times divide these costs into two main groups.  There are settlement fees and there are pre-paid items.  Settlement fees are those fees paid as a cost of buying the home.  They include escrow fees, attorney fees for drafting the documents, filing fees to file the deed of trust with the county courthouse, lender origination fees, underwriting fees and the like.  Pre-paid items include one year of homeowner's insurance, pre-paying the property taxes, paying a couple months of taxes and insurance to form a starting positive balance in the escrow account so money will be there when the taxes and insurance become due.  It is possible to get the seller to contribute to the buyer's closing costs in paragraph 12.A. of the One to Four Family Residential Contract which is a standard form used by all REALTORs® in Texas.  This contract form is produced by the Texas Real Estate Commission (TREC).

For more information read the full article and learn:

What is included in closing costs on a house?