Closing Costs in Texas: A Complete Breakdown of What You Will Pay

Published: March 15, 2026 | Author: Editorial Team | Last Updated: March 15, 2026

Published on mortgageloantx.com | March 15, 2026

Closing costs catch many Texas homebuyers off guard. Lenders are required to provide estimates early in the process, but understanding what each line item actually represents — and which ones are negotiable — helps you prepare financially and avoid surprises on closing day.

What Are Closing Costs?

Closing costs are fees paid at the close of a real estate transaction, separate from the down payment. They typically range from 2% to 5% of the loan amount. On a $350,000 mortgage, that is $7,000 to $17,500. Some fees go to the lender, some to third-party service providers (title company, appraiser, attorneys), and some are prepaid expenses (the first year of homeowners insurance, property tax escrow). Understanding which category each fee falls into determines how negotiable it is.

Lender Fees

Origination fee: charged by the lender for processing the loan, typically 0-1% of the loan amount. Some lenders charge no origination fee but compensate through a higher rate. Points: each discount point equals 1% of the loan amount and buys down the interest rate (typically 0.25% per point). Underwriting fee: covers the cost of evaluating your application, typically $500-$1,500. These fees are directly negotiable with the lender.

Third-Party Fees

Appraisal fee: $400-$700 for a single-family home in Texas. Some lenders absorb this or credit it at closing. Title insurance: Texas title insurance rates are regulated by the Texas Department of Insurance and set by the home purchase price, so rates are the same from any title company. You will pay both lender's title insurance (required) and owner's title insurance (optional but strongly recommended). Settlement/closing fee: charged by the title company or closing attorney for conducting the closing, typically $300-$750.

Owner's title insurance: In Texas, the seller traditionally pays for owner's title insurance. However, this is negotiable — particularly in a buyer's market or on new construction. Always ensure owner's title insurance is part of the transaction; a one-time premium protects your ownership rights indefinitely against prior claims, liens, and title defects.

Prepaid Items and Escrow

Prepaid items are not fees — they are advance payment of ongoing expenses. You will prepay homeowners insurance (typically the first year's premium upfront), prepaid interest from closing date to the end of the month, and initial escrow deposits for property taxes and insurance. These prepaid costs can add several thousand dollars to closing day costs but represent money you would have spent anyway — you are just paying it upfront to fund the escrow account.

Who Pays Closing Costs in Texas?

Both buyer and seller have closing costs. The buyer typically pays lender fees, title insurance, and prepaid items. The seller typically pays the real estate agent commissions (historically 5-6% of sale price), owner's title insurance, and their own closing fees. Seller concessions — where the seller agrees to contribute toward buyer's closing costs — are common in buyer's markets or when buyers request it as part of the offer. In Texas, sellers can contribute up to 3% of the purchase price toward closing costs on conventional loans (more for FHA/VA).

Get a detailed estimate through our closing cost calculator or speak with a Texas mortgage specialist for a personalized loan estimate.

Disclaimer: Closing costs vary by lender, loan type, property, and local customs. This is educational content. Review your Loan Estimate and Closing Disclosure carefully with your lender.