This page provides a breakdown of the mortgage closing costs for purchasing a home in Texas with a conventional loan. While the fees below are for a conventional home loan, FHA, VA, and USDA loans will have the same basic fees; however, those programs will may require Mortgage Insurance Premiums and/or Funding Fees.
We know our fees are very competitive because we constantly secret-shop other lenders. Because the lending industry is extremely competitive, most every lender has a similar fee structure with about a $200 swing in either direction. If you receive an estimate that is significantly different from what we describe below, please call us to ensure you’re comparing apples to apples and that other lenders are presenting all relevant information. We will always provide accurate estimates so that you can confidently plan for closing.
What To Compare
There are three components that make up the funds due at closing when purchasing a home:
- the down payment
- the mortgage closing costs
- the prepaids
Regardless of what lender you choose or what program you choose these costs will exist; however, 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 fees: the owner’s title policy, the survey, and any applicable HOA fees. More details on why we’re excluding these items just expand the sections below.
For an existing home purchase the seller will almost always pay for the tile policy. 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.
For the purchase of an existing home (that is not a bank-owned property) the sellers typically provide a survey that lenders can use. 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 so 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.)
The aforementioned owner’s title policy and survey assumptions are accurate for the vast majority of existing home purchases but whether an HOA exists is property specific. There is an addendum to the contract that can limit your costs as a buyer on the HOA transfer fee so check with your Realtor during contract negotiations. 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.
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 about one to two points charged on that second lien loan amount for the early payoff. Check out Second Lien Mortgages for more information detailing 2nd lien mortgages.
New Construction Home Loans
If you buying a newly constructed home then check out New Construction Closing Costs as there can be additional fees involved with the purchase.