What Closing Costs Cover for Texas Homebuyers

Surprised by how quickly closing costs add up when you start the mortgage process? You are not alone. As you plan a home purchase in Floresville or anywhere in Wilson County, understanding these fees can help you budget with confidence and avoid last-minute stress. In this guide, you will learn what closing costs cover in Texas, typical ranges you can expect, who usually pays what, and smart ways to reduce your out-of-pocket total. Let’s dive in.

What closing costs cover

Closing costs are the third-party fees, lender charges, prepaids, prorations, and escrow deposits needed to complete your purchase. They are separate from your down payment and appear on your Closing Disclosure for financed purchases. In Texas, buyers commonly pay about 2% to 5% of the purchase price in closing costs, depending on loan type and negotiations. On a $300,000 purchase, that can be roughly $6,000 to $15,000.

Texas closings are typically handled by title companies. The exact mix of fees can vary by property and contract terms, so consider early estimates a budgeting guide, not a final bill.

When you see the numbers

After you apply for a loan, your lender must provide a Loan Estimate within three business days. You will receive a final Closing Disclosure at least 3 business days before closing. These documents outline projected and final costs so you can review line items and ask questions in time to make changes if needed.

Common buyer costs in Floresville

Below is a practical breakdown of what buyers in the Floresville and Wilson County area often see on their estimates. All items are negotiable in the contract, but these are common local practices.

Lender and loan fees

• Origination and underwriting: Covers lender processing and underwriting work. Typical range: flat $400 to $1,500 or about 0.5% to 1% of the loan amount.
• Discount points: Optional fee to buy down your interest rate. Often 0% to 2% of the loan amount per point.
• Appraisal: Lender-required to verify value. Commonly $400 to $800 in the San Antonio area; rural or large properties may be higher.
• Credit report: Usually $25 to $50.
• Flood certification and automated underwriting: Typically under $100 each.

Title and closing fees

• Owner’s title policy: Protects your ownership. In many Texas markets, the seller commonly pays this one-time premium, but confirm in your contract. Premiums are set by Texas rate schedules and vary with price.
• Lender’s title policy: Required by your lender to protect the mortgage. Typically paid by the buyer; cost varies with the loan amount.
• Title search, exam, and closing/settlement fee: Often $300 to $800. Who pays can vary by contract.
• Recording fees: Paid to the county to record the deed and deed of trust. Often $50 to $300 total in Texas, depending on county schedules.

Inspections and property reports

• Home inspection: Usually $300 to $600, paid before closing.
• Pest or termite inspection: Common in Texas. Often $50 to $150.
• Survey: If required by your lender or if you want updated boundaries. Often $300 to $1,200, depending on lot size and rural factors. Some sellers can provide a recent survey.
• Septic and well inspections: Common for rural Wilson County properties. Often $200 to $800 each depending on scope.

Prepaids, prorations, and escrow

• Homeowner’s insurance: You typically pay the first year’s premium at closing. Many plans range from about $800 to $2,000+ per year depending on coverage and risk.
• Property tax proration: Texas property taxes are paid in arrears and prorated at closing. You may see a debit or credit depending on the closing date and the local tax cycle.
• Initial escrow deposit: Lenders often require funds to start your escrow account for taxes and insurance. The initial deposit can be several hundred to several thousand dollars. Federal rules allow up to two months of escrow payments plus a cushion in many cases.
• Mortgage insurance: If your loan requires PMI, there may be an upfront amount or the first monthly premium collected at closing.

Local fees and HOA items

• Recording and local permits: Wilson County recording fees are modest but variable. The title company will obtain exact amounts.
• HOA transfer or resale certificates: If the property is in an HOA, transfer-related fees may apply. Amounts often range from about $100 to $400+ and payment responsibility varies by contract.
• Transfer tax: Texas has no state real estate transfer tax. You will still pay local recording fees.

Who pays what in Texas

Texas custom often splits title-related costs as follows: the seller commonly pays for the owner’s title insurance policy, and the buyer pays for the lender’s title policy, appraisal, inspections, recording fees tied to the mortgage, and prepaids and escrow deposits. Every line item is negotiable. Confirm payment responsibilities in your purchase contract and verify with your title company.

Estimate your cash to close

To get a working estimate:

1. Start with the down payment required by your loan program.
2. Add buyer closing costs. Budget 2% to 5% of the purchase price as a planning range.
3. Include prepaids and your initial escrow deposit for taxes and insurance.
4. Subtract any seller credits or lender credits you negotiated.

Your Closing Disclosure will show the final “Total Closing Costs” and “Cash to Close.” Review those lines carefully and ask your lender and title company to explain anything that looks unfamiliar.

Ways to reduce costs

• Shop lenders: Compare Loan Estimates from at least two or three lenders. Ask about lender credits and the rate tradeoff so you can weigh the lifetime cost.
• Negotiate seller credits: You can request seller-paid closing costs or for the seller to pay for the owner’s title policy. Different loan programs set limits on seller concessions, so check your program’s rules.
• Look for assistance: Ask about Texas and regional first-time buyer programs that can help with down payment or closing costs if you qualify.
• Time your closing: The date can change your initial escrow deposit because of tax and insurance timing.
• Avoid last-minute changes: New fees or loan changes late in the process can trigger re-disclosures and delays. Give your lender complete info early.

Tips for rural and acreage buyers

Wilson County has many homes on acreage outside city limits. If you are buying rural property, plan for a few extras:

• Septic and well: Budget for inspections and any certifications your lender may require. This protects your investment and loan eligibility.
• Survey accuracy: Larger tracts can mean higher survey costs. If a seller has a recent survey, ask for a copy early.
• Flood risk: Your lender will order a flood certification. If the property is in a FEMA flood zone that requires flood insurance, you must secure coverage before closing, which can increase prepaid costs.

Next steps in Wilson County

• Request a Loan Estimate from any lender you are considering, and compare line items.
• Ask your title company for written estimates of title premiums and closing fees, including both owner’s and lender’s policies.
• Contact the Wilson County Appraisal District and Tax Assessor-Collector for current assessed values, tax rates, and billing timing so you can understand prorations.
• Confirm recording fees and any local filing requirements with the Wilson County Clerk through your title company.

Ready to walk through your numbers and explore strategies to save? Reach out to Kelly Wiggins for a clear, local plan from offer to closing.

FAQs

What are closing costs for Texas buyers?

• Closing costs are the lender fees, third-party services, prepaids, prorations, and escrow deposits needed to complete a purchase, separate from your down payment.

How much should I budget in Floresville?

• A common planning range is 2% to 5% of the purchase price, plus your down payment and initial escrow deposits for taxes and insurance.

Who usually pays for title insurance in Texas?

• It is common for sellers to pay the owner’s title policy, while buyers pay the lender’s policy and many closing fees. Always confirm in your contract.

Are inspections part of my closing costs?

• You typically pay for inspections upfront before closing, but they are part of your overall homebuying budget.

Will I fund taxes and insurance at closing?

• Most buyers pay the first year of homeowner’s insurance and make an initial escrow deposit. Property taxes are prorated between buyer and seller at closing.

Can the seller help with my closing costs?

• Yes. Seller-paid credits are negotiable and subject to your loan program’s limits on concessions.