What Are Closing Costs in Texas?
What you'll pay at the closing table, who pays what, and how to bring it down
By Natalie Pilkinton, REALTOR® & Real Estate Investor · Updated
Short answer
Texas home buyers typically pay about 2% to 5% of the purchase price in closing costs, on top of the down payment. On a $350,000 home, that's roughly $7,000 to $17,500.
Closing costs cover lender fees, the appraisal, the lender's title policy, the escrow fee, a survey if one is needed, and prepaid items like your first year of homeowners insurance and escrow reserves for taxes. In Texas the seller customarily pays for the owner's title policy, and seller concessions or down payment assistance can cover some of the rest.
What Texas buyers typically pay
| Cost | Typical range | Notes |
|---|---|---|
| Loan origination | 0%–2% of the loan | Negotiable on conventional and FHA loans; capped at 1% on VA loans |
| Underwriting and lender fees | About $800 | Plus a credit report, usually $25–$75 |
| Appraisal | $450–$900 | Ordered by your lender |
| Lender's title policy | $100–$300 | When issued together with the owner's policy |
| Escrow / settlement fee | $250–$750 | Often split between buyer and seller |
| Survey | $400–$700 | Only if the seller's existing survey can't be used |
| Homeowners insurance | First year, paid upfront | Often $2,200–$4,500 a year in the Houston area |
| Escrow reserves and prepaid interest | Varies | Usually 2–3 months of property taxes, 2 months of insurance, and interest to the end of the month |
Ranges as published by Herring Bank in May 2026. Your lender's Loan Estimate shows your actual figures.
Money due before closing
A few costs come out of pocket while you're under contract, before the closing table:
- Earnest money: often about 1% of the price. It's held by the title company and credited toward your costs at closing.
- Option fee: a negotiated amount for the option period, when you can back out for any reason. It's usually credited at closing too.
- Home inspection: generally $400–$1,000, depending on the home and add-ons like a wood-destroying insect inspection. It isn't refundable.
What's different in Texas
- Title insurance rates are set by the Texas Department of Insurance, so the premium is the same at every title company. Choose a title company for its service.
- The seller customarily pays for the buyer's owner's title policy. It's a negotiated item in the contract, not a law, so confirm it in your offer.
- Under the current Texas contract (TREC 20-19), your earnest money and option fee go to the title company within 3 days of the contract's effective date. If the option fee is late, you lose your right to back out during the option period.
- Property taxes are paid in arrears, so the seller credits you at closing for their share of this year's taxes.
- If the seller has a survey the title company will accept, signed with a T-47 affidavit that nothing has changed, you may not need to pay for a new one.
How to lower your closing costs
- Negotiate seller concessions. The seller can agree to pay part of your closing costs. Each loan type caps how much: commonly 3% to 9% on conventional loans depending on your down payment, 6% on FHA and USDA, and 4% plus normal closing costs on VA. Your lender confirms the limit.
- Look at new construction. Builders trying to move finished inventory homes often offer thousands toward closing costs. Use your own Realtor so the incentive works for you, not just the builder. See buying new construction.
- Apply for down payment assistance. Texas programs can cover your down payment and sometimes part of your closing costs. See financing and down payment assistance.
- Compare Loan Estimates. Lenders must give you a Loan Estimate within 3 business days of your application. Compare lender fees and points line by line, and review your Closing Disclosure, which you'll receive at least 3 business days before closing.
- Shop your homeowners insurance. Get three or four quotes from different agencies. The first year's premium is paid at closing, and it sets your monthly escrow afterward.
After closing: file your homestead exemption
If the home is your primary residence, file a homestead exemption (Form 50-114) with your county appraisal district. It's free, you only file once, and the standard deadline is April 30. The exemption lowers the taxable value of your home and caps how fast it can rise on your homestead.
Since 2025, the school district homestead exemption is $140,000, with an extra $60,000 for homeowners who are 65 or older or disabled. The title company won't file it for you.
Frequently asked questions
How much are closing costs for a buyer in Texas?
Typically about 2% to 5% of the purchase price, not counting your down payment. Your lender's Loan Estimate gives you the actual figures for your loan.
Who pays for title insurance in Texas?
By custom, the seller pays for the owner's title policy and the buyer pays for the lender's policy. It's negotiable and set in the contract. Premiums are set by the Texas Department of Insurance, so they're the same at every title company.
Can the seller pay my closing costs?
Yes, through seller concessions, up to the limit your loan allows — commonly 3% to 9% on conventional loans, 6% on FHA and USDA, and 4% plus normal closing costs on VA.
Can closing costs be rolled into my loan?
Generally not on a purchase, though some upfront fees can be, like FHA's upfront mortgage insurance or the VA funding fee. Seller concessions, lender credits and down payment assistance are the usual ways to reduce cash at closing.
Is earnest money part of my closing costs?
No, but it's credited toward what you owe at closing. If the deal closes, it counts toward your down payment or costs.
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