Buying a home involves more than a down payment. From mortgage fees to title insurance, every purchase comes with closing costs, and knowing what to expect helps you plan with confidence when it’s time to close.

What Are Closing Costs?

Closing costs are one-time fees paid when buying or refinancing a home. They cover loan processing, title verification, and the transfer of ownership.

You’ll pay most of these costs on closing day. While the exact amount varies, they commonly range from 2% to 5% of your loan amount.

For example, on a $400,000 home, that’s about $8,000 to $20,000 in closing costs.

Common Closing Costs for Buyers

Typically, you’ll get a detailed breakdown early in the loan process. By law, you’ll receive a Closing Disclosure listing your exact costs at least three business days before closing. Here are the most common expenses you might see:

  • Appraisal fee: Pays for a licensed appraiser to confirm the home’s value.
  • Loan origination and underwriting fees: Charged by your lender to process your mortgage.
  • Credit report fee: Covers the cost of pulling your credit history.
  • Title search and title insurance: Protects you and your lender from ownership disputes.
  • Recording fees: Charged by local government to document the sale.
  • Prepaid costs: Include homeowners insurance, property taxes, and interest from your closing date to your first payment.

Who Pays Closing Costs in Texas?

In Texas, both buyers and sellers have closing costs, but sellers typically pay more. Seller expenses, like agent commissions and title insurance, can total 6% to 10% of the sale price, while buyers usually pay between 2% and 5%.

However, these costs are often negotiable. Sellers may agree to cover part of the buyer’s expenses, called seller concessions, especially if they’re motivated to close the deal quickly.

Ways to Lower Your Closing Costs

While you can’t avoid closing costs altogether, there are smart ways to reduce them:

  • Shop around for title, inspection, and homeowners insurance services, small differences can save hundreds.
  • Ask about lender credits or discounts.
  • Look into down payment or closing cost assistance programs offered statewide or in your city.
  • Negotiate seller concessions as part of your offer.

The Bottom Line

Closing costs are a normal part of every home purchase, but with the right preparation, they don’t have to be a surprise.

If you’re buying a home in Texas, the Decker Team can help you understand your costs and make homeownership more affordable. Call us at (972) 591-3097 or connect with us online.