Mortgage Closing Costs in Texas: What to Expect

Quick Answer

Closing costs in Texas typically run 2% to 5% of the loan amount, on top of your down payment. They fall into three buckets: lender fees (origination, appraisal, credit), title and escrow (title insurance, closing fee, recording), and prepaids (property taxes and homeowners insurance set aside in escrow). You can reduce them with lender credits, seller concessions, or down-payment-assistance programs.

What's actually in your closing costs

• Origination / lender fees — processing and underwriting the loan (a broker's compensation is often lender-paid, built into the loan's pricing).
• Appraisal fee — roughly $400–$700 for the required property valuation.
• Credit report fee — a small charge to pull your credit.
• Title insurance & title search — in Texas, title insurance rates are regulated and set by the state.
• Escrow / closing fee — paid to the title company handling the closing.
• Prepaids & escrow — upfront property taxes and homeowners insurance, plus reserves.
• Recording & government fees — to record the deed and mortgage.

A Texas-specific note on title insurance and taxes

Texas is one of the states where title insurance premiums are regulated — the rate is set by the Texas Department of Insurance, so it doesn't vary from one title company to the next. That makes title cost predictable, though you can still negotiate who pays it.

Because Texas property taxes are high, the prepaid tax portion of your closing costs can be substantial — the escrow account needs enough to cover the next tax bill. Your Loan Estimate breaks this out line by line.

How to reduce or offset closing costs

• Seller concessions — negotiate for the seller to pay part of your closing costs (limits vary by loan type).
• Lender credits — accept a slightly higher rate in exchange for the lender covering some costs.
• Down-payment-assistance programs — TSAHC and TDHCA can cover closing costs, not just the down payment.
• Shop the loan — a broker comparing lenders can compare total costs, not just rates.

Frequently Asked Questions

How much are closing costs on a house in Texas?

Texas closing costs generally run 2% to 5% of the loan amount. On a $300,000 loan that's roughly $6,000–$15,000, covering lender fees, title and escrow, and prepaid taxes and insurance. Your estimated costs appear on the Loan Estimate you receive within three business days of applying; final figures come on the Closing Disclosure.

Who pays closing costs in a Texas home purchase?

Both parties pay different costs, but they're negotiable. Buyers typically cover lender fees, appraisal, and prepaids. In Texas, sellers customarily pay the owner's title policy that protects the buyer, while the buyer pays the lender's title policy, and sellers can agree to cover part of the buyer's closing costs as a concession. What each side pays is set in the purchase contract.

Can closing costs be rolled into the loan?

Sometimes. On a refinance you can often roll closing costs into the loan balance. On a purchase you generally can't finance them directly, but you can use lender credits (a slightly higher rate) or seller concessions to avoid paying them out of pocket. VA and USDA loans have specific rules that can help too.

Why is title insurance the same price everywhere in Texas?

Texas regulates title insurance rates through the Texas Department of Insurance, so the premium is the same regardless of which title company you use. This differs from many states where you can shop title costs. You can still negotiate which party pays the premium in your contract.

What's the difference between closing costs and a down payment?

Your down payment is the portion of the purchase price you pay toward the home itself and becomes equity. Closing costs are separate fees to originate the loan and transfer the property — lender, title, and prepaid costs. You need cash for both at closing, which together make up your total cash-to-close.