Closing Costs in Texas: What Buyers Actually Pay
Buyers budget carefully for a down payment and then get blindsided at the settlement table. Closing costs in Texas are a separate pile of money, they are due at closing in certified funds, and they are not small.
This is what the pile is actually made of.
What Goes Into Closing Costs in Texas
Broadly, four categories:
Lender charges
Origination or underwriting fees, discount points if you are buying the rate down, credit report fees, and the appraisal. The appraisal is ordered by the lender but paid by the buyer in most cases, often up front rather than at closing.
Title and escrow
Title insurance, escrow and settlement fees, recording fees, and the survey if a new one is required. Texas has its own title insurance structure, and in most residential transactions here the seller customarily pays for the owner’s title policy while the buyer pays for the lender’s policy — though like everything else in the contract, that is negotiable.
Prepaids and escrow reserves
This is the category that catches people out, because it is not a fee for anything — it is money you were always going to spend, collected early. Your lender sets up an escrow account and funds it with several months of property taxes and a full year of homeowner’s insurance premium, paid at closing.
In Fort Bend County this line runs high for two local reasons. Property tax rates here are substantial, and in many newer subdivisions a MUD assessment sits on top of the base rate. A full year of Gulf Coast windstorm and hail coverage is also a larger number than inland buyers are used to. Both get funded at the table.
Option fee and earnest money
Both are due within three days of an executed contract, well before closing. The option fee is typically a few hundred dollars and buys your right to terminate during the option period. Earnest money is larger, sits in escrow, and is credited back to you at closing — so it is not an additional cost, just an earlier one.
Where the Number Usually Lands
Closing costs commonly run somewhere in the low single-digit percentages of the purchase price for a buyer, but the honest answer is that the range is wide and driven heavily by the prepaid category above. A house with a high tax rate and expensive windstorm coverage will produce a materially larger closing figure than a similarly priced house without either.
Rather than work from a percentage, work from the document. Your Loan Estimate itemises every line within three business days of application, and the Closing Disclosure does the same at least three days before closing. The CFPB’s guide to comparing Loan Estimates shows how to put two lenders’ numbers side by side, which is the only reliable way to see which offer is genuinely cheaper once fees are included.
Ways to Reduce What You Bring
- Seller concessions. You can negotiate for the seller to contribute toward your closing costs, subject to loan-type limits. Our guide to seller concessions for Texas buyers and sellers covers how these work and what they cost you elsewhere in the deal.
- Lender credits. Accept a slightly higher rate in exchange for the lender covering costs. Sensible if you are short on cash now and plan to move or refinance before the higher rate outweighs the credit; expensive if you keep the loan for thirty years.
- Shop the lender. Lender-side fees vary more than borrowers expect, and they are the most negotiable part of the stack.
- Assistance programs. Several Texas down payment and closing cost assistance programs exist, with income and location eligibility rules. Worth asking a lender to check whether you qualify before assuming you do not.
The Part Worth Repeating
Down payment and closing costs are two separate savings targets. Budgeting for one and not the other is the most common reason an otherwise ready buyer has to delay a closing — and the fix is simply knowing the number early, which your Loan Estimate gives you.
Closing costs sit at step five of the sequence, in the affordability stage, for exactly that reason. The full order is in our home buying checklist for Texas buyers, and saving a down payment covers the other half of the cash question.
Want the numbers run on a specific house before you make an offer? Call Terra Point Realty at (713) 766-1697.
About the author — Stacy Burgin is a Texas real estate agent with Terra Point Realty serving Katy, Fulshear, Richmond and the wider Fort Bend County area. She has closed more than 300 transactions, including over 130 home sales representing roughly $30 million in volume, and holds HAR Platinum recognition with a 4.89 client satisfaction rating across 124+ surveys.