Closing Costs for Buyer
Looking for the home loan closing costs for buyer in Texas? There are three components that make up the funds due at closing when buying a home and getting a home loan. First the Down Payment. Second, the Mortgage Prepaids. And finally, the mortgage closing costs for buyer. This page only covers the actual closing cost (i.e. not the down payment or the prepaids). Below is a breakdown of the estimated closing cost for a buyer using conventional financing. FHA, VA, and USDA loans will have the same basic fees but may require Mortgage Insurance Premiums or Funding Fees.
Estimated closing cost for buyer are approximately $2,750.
We know our fees are very competitive because we constantly secret-shop other lenders. Most every lender has a similar fee structure with about a $200 swing in either direction. If you receive an estimate that is significantly differs from below, please call us to ensure you’re comparing apples to apples. We’ll verify that other lenders are presenting all closing cost for buyer. We will always provide accurate estimates so that you can confidently plan for closing.
How to Compare Closing
Regardless of what lender you choose or what program you choose costs exist. There are various methods on How To Pay For Closing Costs when Shopping For A Mortgage so be sure you’re comparing apples to apples. Our recommendation is to only compare the lender fees as the down payment, third party fees, and prepaids will be the same regardless of lender.
There are three major assumptions being made in the aforementioned breakdown and we are excluding some fees. The other potential closing costs for buyer are: the owner’s title policy, the survey, and any applicable HOA fees.
Owner’s Title Policy – Typically Paid By Seller
For an existing home purchase the seller will typically pay for the tile policy. A common exception is when you’re buying from a builder – see New Construction Closing Costs. The title policy fee varies based on the purchase price but the costs is approximately .75% of the home’s purchase price. Check out our Title Policy Calculator for a better estimate of the title policy.
Survey – Typically Provided By Seller
For the purchase of an existing home (that is not a bank-owned property) the sellers typically provides a survey that lenders can use. A common exception is when you’re buying from a builder. The New Construction Closing Costs includes the costs of a survey.
If a survey does not exists or is not accurate, it’s our opinion that the sellers should pay for a new survey. This is a point of negotiation on the contract. Be be sure to connect with your Realtor during your negotiations. The costs of a survey is about $400. (Note: Texas loans must have survey. Loans in other states may not require a survey.)
HOA Fees – If Applicable
HOA fees are property specific. There is an addendum to the contract that can limit closing costs for buyer on the HOA transfer fee. Check with your Realtor during contract negotiations to ensure you’re protected. HOA transfer fees typically range from $100 to $500 and is a one-time fee charged by the HOA when title is transferred and is used to help build their cash reserves. We call it the “welcome to the neighborhood” fee. Condos, town homes, and new construction will typically have HOA fees.
If there’s an HOA then there will be pro-rated HOA dues including in the Prepaids section.
Second Lien Fees = $700
If you’re getting a second lien then you can expect an additional $500 to $700 to be due at closing for their second lien fees. However, if you’re getting a second lien that’s a Bridge Loan then you can also expect to pay point. Most bridge loans require about one to two points for the early payoff. Check out Second Lien Mortgages for more information detailing 2nd lien mortgages.
New Construction Home Loans
Newly constructed homes typically have additional closing costs for buyer. Check out New Construction Closing Costs for more details.