What are closing costs and how much should I expect to pay?
Reviewed August 2026 by Shannon Miles Group
Closing costs are fees paid at the end of a real estate transaction, typically 2 to 5 percent of the purchase price. They include lender fees, title insurance, appraisal, attorney fees, and prepaid items like taxes and insurance.
Understanding your closing costs.
Closing costs are the fees and expenses you pay to finalize your home purchase. They cover everything from the lender's processing to the title search and recording fees. In Texas, closing costs tend to be on the higher side due to title insurance rates and survey requirements.
Breakdown of buyer closing costs
Lender fees
These include the loan origination fee (typically 0.5 to 1 percent of the loan amount), application fee, processing fee, underwriting fee, and rate lock fee. Some lenders bundle these into a single origination charge.
Title insurance
Texas requires a title search and title insurance policy to protect against ownership disputes. The lender's policy is required. An owner's policy is optional but recommended. Title insurance rates are regulated in Texas.
Appraisal fee
Your lender requires an appraisal to confirm the home's value. This typically costs $400 to $700 and is paid at closing or upfront when the appraisal is ordered.
Home inspection
While not a closing cost, the home inspection ($300 to $500) is typically paid separately during the inspection period. Budget for it alongside your closing costs.
Survey
Texas lenders often require a survey to confirm property boundaries. Survey costs vary by property size and location, typically $400 to $1,000 for standard lots.
Prepaid items
These include property taxes (prorated between buyer and seller), homeowners insurance (first year paid upfront), and mortgage interest (from closing date to end of month). These are not fees but advance payments into escrow accounts.
Seller-paid closing costs
Sellers may agree to pay some of your closing costs as a concession. This is most common in slower markets or when buyers have limited cash. Ask your agent whether a seller concession is realistic in your market.
Closing costs in Texas.
Texas closing costs tend to be higher than the national average because of title insurance rates (regulated by the state) and the prevalence of survey requirements. On a $300,000 home, expect total closing costs of roughly $6,000 to $15,000 depending on your loan type and local fees.
Ask your lender for a Loan Estimate as soon as you have a property under contract. This document gives you a detailed breakdown of all closing costs and allows you to compare fees. Review it carefully with your agent before closing.
Some local lenders in Northeast Texas have lower origination fees than national banks. It pays to compare multiple lenders before committing.
Planning for closing costs.
- Get a Loan Estimate early. Within three days of applying for a mortgage, your lender must provide a Loan Estimate. Use it to understand your total cash needed.
- Compare lender fees. Origination fees, processing fees, and underwriting fees vary by lender. Shop around for the best combination of rate and fees.
- Ask about seller concessions. In some markets, sellers may agree to pay up to 3 to 6 percent of the purchase price toward your closing costs.
- Budget for prepaids. Your first year of homeowners insurance and several months of property taxes will be collected at closing. These are real cash costs.
- Ask your agent for estimates. We see closing costs every week. We can give you a realistic estimate before you even start looking at homes.
More answers you might find useful.
Want to know your total cash needed?
Call us or stop by the office at 2322 Lamar Ave. in Paris. We can help you estimate your total closing costs before you start shopping.