Day 6: Plan for Closing Costs
A Practical Guide for North Texas Home Buyers
One of the biggest surprises for many home buyers is not the down payment. It is the closing costs. If you are planning to buy a home in North Texas, understanding these expenses early can help you avoid last minute stress and make more confident decisions.
This article is part of my 30 Day Home Buying Preparation Checklist Series, created to help buyers get organized before they ever start touring homes.
What Are Closing Costs?
Closing costs are the fees and prepaid expenses required to finalize your home purchase and loan. These costs are separate from your down payment and are paid at the closing table.
They cover the behind the scenes work that makes a transaction official, including lender processing, title verification, insurance setup, and government recording.
The Consumer Financial Protection Bureau explains how these costs fit into the overall home buying process and what buyers should expect before closing:
https://www.consumerfinance.gov/owning-a-home/closing-costs/
How Much Are Closing Costs in North Texas?
Most buyers in North Texas can expect closing costs to fall between:
2 percent to 5 percent of the purchase price
For example:
- A $300,000 home may have closing costs between $6,000 and $15,000
The exact amount depends on factors like loan type, property taxes, homeowner’s insurance, and whether any seller concessions are negotiated.
What Do Closing Costs Usually Include?
Your closing costs may include a combination of fees and prepaid items, such as:
- Loan origination or underwriting fees
- Appraisal and credit report fees
- Title search and lender’s title insurance
- Escrow and recording fees
- Home inspection costs
- Prepaid property taxes and homeowner’s insurance
Texas buyers often notice higher prepaid tax amounts at closing, depending on when the home is purchased during the year.
Prepaid Costs vs Fees: What Is the Difference?
Not everything listed in your closing costs is a fee.
Some amounts are prepaid expenses, meaning money collected upfront to set up your escrow account. These often include:
- The first year of homeowner’s insurance
- Property taxes placed into escrow
- Daily interest from the day you close until your first payment
These funds are not lost. They help ensure future bills are paid on time.
Who Pays Closing Costs?
In most transactions, buyers pay the majority of closing costs. However, depending on the market and negotiations:
- Sellers may contribute toward closing costs
- Credits may be negotiated in the contract
- Certain loan programs may allow reduced upfront costs
Texas buyers can review consumer protections and transaction basics through the Texas Real Estate Commission, which outlines how licensed professionals are required to handle disclosures and fees:
https://www.trec.texas.gov/agency-information/consumer-protection
When Will I Know the Final Amount?
You will not be guessing.
Early in the process, your lender provides a Loan Estimate, which outlines projected costs. Before closing, you will receive a Closing Disclosure at least three days in advance, showing your final numbers.
The Consumer Financial Protection Bureau explains how to read and compare these documents so buyers can spot changes and ask questions before signing:
https://www.consumerfinance.gov/owning-a-home/closing-disclosure/
How to Prepare for Closing Costs Now
Smart preparation makes a big difference:
- Save beyond your down payment goal
- Avoid large purchases during escrow
- Review estimates carefully
- Ask questions early if something does not make sense
Understanding your closing costs upfront allows you to move forward confidently instead of feeling rushed at the end.
Part of the 30 Day Home Buying Preparation Checklist Series
This post is Day 6 of my 30 Day Home Buying Preparation Checklist Series, designed for buyers who want clarity before starting their home search.
You can download the entire checklist at:
https://sellwithhaste.com
What Is Next?
Come back tomorrow for Day 7: Explore Neighborhoods, where we will talk about how to evaluate North Texas communities beyond listing photos.
If you have questions about closing costs or want help planning your purchase:
Toni Haste, Realtor
Texas Pride Realty Group
Brokered by HomeSmart Stars
817-319-0247