Texas buyer closing costs, line by line

Two homes, 10% down on a conventional loan, and a June 15, 2026 closing with the first payment due August 1. Title figures come straight from Texas Department of Insurance rules. Everything a lender or vendor prices for itself is a labeled placeholder.

Mortgage insurance on a conventional loan with less than 20% down is often paid monthly, so it does not appear here. FHA and VA loans add their own upfront fees.

Lender charges are where buyers have the most room to compare. Within three business days of your application, every lender must give you a Loan Estimate in the same standard format, which makes side-by-side comparison practical. Three business days before closing you get a Closing Disclosure with the final numbers.

• Origination and underwriting. What the lender charges to make the loan. Ask whether any of it is discount points, which buy a lower rate.
• Appraisal. Ordered by the lender, paid by you. The TREC contract lists appraisal fees among the buyer’s expenses.
• Third-party items. Credit report, flood certificate and tax service, usually small.

The TREC contract lets the seller agree to pay part of your expenses, up to a dollar amount written into Paragraph 12A(1)(b). That is a negotiation, not a given.

Title premiums in Texas are set by the state, so they are the same at every title company. When your lender’s policy is issued together with the owner’s policy, it costs a flat $100. Lenders also require endorsements, each priced by rule:

• T-19 (restrictions, encroachments, minerals): 5% of the basic rate on the loan amount, at least $50. On a $315,000 loan the basic rate is $1,842, so the endorsement is $92.
• T-36 (environmental lien): $25.
• T-17 (planned unit development): $25, when the home is in one.

The owner’s policy is usually the seller’s cost in Dallas-Fort Worth, but the contract has a box for either side. One related item often lands on the buyer: amending the survey exception to read “shortages in area,” which costs 5% of the owner’s premium on a home. At $350,000 that is $101.

The escrow fee is not set by the state and varies by company. By default the contract splits it in half. You can use any title company you like, and the Texas Department of Insurance says so in writing.

Prepaids are not fees. They are your own future bills, paid in advance because the lender wants them covered.

• Homeowners insurance. Your lender will require it, and the contract lists the required premium among the buyer’s expenses at closing.
• Escrow deposits. A starting balance for the account your lender uses to pay taxes and insurance. The lender calculates it from your closing date and the next due dates.
• Interest. The contract has you pay interest from the day the loan funds to one month before your first payment. Close on June 15 with an August 1 first payment, and you prepay June 15 through 30.

Rates and exemptions by city and school district: property taxes in Tarrant, Parker and Johnson counties.

Within 3 days after the contract’s effective date, you deliver two payments to the escrow agent: the option fee and the earnest money. Neither is an extra cost if the deal closes.

• Option fee. Buys the right to terminate for any reason during the option period. The escrow agent can release it to the seller right away, and under TREC’s contract it is credited to the sales price at closing. If you terminate in time, the seller keeps it.
• Earnest money. Held by the escrow agent. At closing it is applied first to your down payment, then to your closing costs. If you terminate within the option period, it is refunded.
• Tax proration. The seller’s share of the current year’s taxes, credited to you as described above.

In the example, those three credits total $6,884 on the $350,000 home and $10,803 on the $550,000 home.

How much are buyer closing costs in Texas?

Freddie Mac’s rule of thumb is 2% to 5% of the purchase price. In our worked example, a buyer financing a $350,000 home with 10% down pays about $3,800 in closing costs plus $6,200 in prepaid insurance, tax escrow and interest, about 2.9% of the price, before credits.

Are the option fee and earnest money part of my closing costs?

No. You pay both within 3 days after the contract’s effective date, and both come back to you as credits at closing. Under TREC’s resale contract the option fee is credited to the sales price, and the earnest money is applied first to your down payment, then to your closing costs.

Can I choose my own title company in Texas?

Yes. The Texas Department of Insurance says you can use any title company, even if an agent, lender or builder recommends one. Title premiums are set by the state, so they are the same everywhere; other closing fees can differ.

Why does the seller give me a credit for property taxes?

Texas property taxes are paid in arrears, so the current year’s bill arrives after you own the home. The seller credits you for their share of the year through the closing date, and you pay the full bill when it comes.