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Most Common Closing Costs When Purchasing a Home

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Common Closing Costs When Purchasing a Home-Krista-Moreno-Seguin-Texas-Real-Estate-Guadalupe-County-Real-Estate-Selling-a-Home-Real-Estate-Market-in-Guadalupe-County

Buying a home is a significant financial undertaking, and while it’s difficult for buyers to fathom paying additional out-of-pocket expenses, closing costs in Texas can run an additional 2-6% of the home’s purchase price.  Buyers must understand the added fees before it’s time for the keys to exchange hands.  Here’s a breakdown of the most common closing costs when purchasing a home. 

Loan Origination

The lender charges the origination fee for processing the loan application. It is typically a percentage of the loan amount, often around 1% of the loan amount.

Escrow Deposits

Lenders may require the buyer to make escrow deposits for earnest money, property taxes, homeowners insurance, etc.  The amount you must pay varies by lender, loan type, and location.  This process protects the buyer and seller by ensuring the necessary funds and documents are available before the sale is finalized.


Lenders often require a professional appraisal to ensure the property’s fair market value matches the loan amount.  According to the National Association of REALTORS®, the median price for a home appraisal of a typical single-family home is $500.

Home Inspection

A home inspection is a thorough examination of the property’s condition.  While the inspection is usually paid before closing, it’s a cost to consider.  A home inspection will typically run $300 to $500. The exact price of an inspection depends on the property’s size and scope. 

Title Insurance

Title insurance protects both the buyer and the lender against potential title issues.  This fee is paid to the title company to ensure the property is free and clear of any liens or ownership disputes. A ballpark figure for this service starts at $175.

Survey Fee

A property survey is optional in some instances.  However, the lender may require a professional surveyor to determine where the property lines are drawn to ensure encroachment or easement issues are not present. The cost of a residential survey will vary depending on the property’s size, scope, and location. While there is no set price for a residential survey, the average cost in Texas is around $500.

Recording Fees

The local government charges a fee to record the home purchase in public records.  The fees vary by county but can range from $100-$300 or more, depending on the property. 

Prepaid Interest

The buyer typically pays interest on the loan from the closing date until the first monthly mortgage payment. This upfront interest payment may be required at closing.

Understanding and planning for these additional closing costs will help home buyers avoid financial surprises. It is crucial to conduct thorough research and work closely with lenders and your REALTOR®  to navigate the complexities of purchasing a home.  I am always here to help!  Email me at krista@bloomrealtytx.com or call me at 830.305-5248.

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