Unless you plan on buying a new house with cash, mortgage loans are a significant part of the home buying process. However, many homebuyers often overlook the additional expenses beyond the down payment and monthly mortgage payments when budgeting for homeownership.
Closing costs in Texas are the processing fees you pay to your mortgage lender when you finalize your home loan.
When considering all the costs and fees associated with buying a home using FHA loans or other types of financing, you might wonder what else is included in “closing” costs. Before you receive the keys to your new home and take ownership, you must meet with your broker and real estate agents to finalize the home purchase and pay the remaining costs.
Typical Closing Costs in Texas
Closing costs in Texas usually range from 2% to 5% of your mortgage loan amount. For instance, if you buy a $100,000 home with a 10 percent down payment ($10,000) and your closing fees amount to 2 percent of the purchase price ($4,000), you’ll need to pay an additional $1,500 out-of-pocket at closing. These costs cannot be included in the monthly mortgage payment, and often, you’ll need to bring a cashier’s check to cover the closing costs in Texas.
Closing costs include the fees for essential services required to transfer home ownership from the seller to the buyer. Both the buyer and seller are responsible for covering these costs. In Texas, seller closing costs usually fall within the range of 6-10% of the selling price, whereas buyer closing costs typically span from 2-6% of the home.
The total closing costs can vary depending on the size of the mortgage loan, as larger loans often translate to a smaller percentage paid in closing costs. Both the buyer and seller receive the final closing cost figures at least 3 business days before the closing date.
What sets Texas United Mortgage apart from most lenders is the flexibility offered to conventional loan borrowers regarding taxes and insurance payments. Unlike most lenders that require you to place your homeowners insurance and property taxes in escrow, Texas United Mortgage allows you to manage these funds yourself. This means you can hold onto your money instead of having the bank control it.
Other lenders often charge extra to pad their accounts and then lower your payment later on. With Texas United Mortgage, you have the freedom to hold your tax and insurance money and make payments at your discretion. This flexibility allows you to place the money in a high-yield savings account until you’re ready to make the payment.
Additionally, other lenders may impose penalty fees for not placing money in escrow, often building these fees into the mortgage rate or loan fees without your knowledge. Texas United Mortgage believes in giving you control over your finances, letting you choose how to spend your money and when to pay your fees.
Closing costs in Texas can vary depending on your location and the type of mortgage loan you qualify for. Typical closing costs include, but are not limited to:
If you’re unsure about any of these fees or why they’re necessary when buying a home, a mortgage expert from Texas United Mortgage can walk you through each cost and explain how they apply to your situation.
Unfortunately, the home buying process doesn’t work that way. While sellers usually cover real estate agent commissions (for both buyer and seller agents) and a few other final costs, buyers pay most closing costs to officially own a new home.
If you’re a mortgage applicant expecting your mortgage to cover the money for your down payment, closing costs, and other prepaid expenses because you have excellent credit, think again. It’s important to work with one of the best mortgage companies Texas offers to find the best financing options and accurately estimate how much you’ll need to bring to your closing to cover closing costs.
What Impacts Closing Costs in Texas?
The type of mortgage you choose and other factors can impact how much you’ll pay in closing costs in Texas. For example, mortgage applicants with low credit scores often have to pay mortgage companies in Texas for a more in-depth mortgage underwriting process.
This is due to a mortgage lender’s risk for issuing a mortgage loan to a mortgage applicant who they believe will default on their mortgage payments. Federal Housing Administration (FHA) mortgage lenders also charge more closing costs when borrowers put down less than 20 percent of the purchase price.
The right mortgage expert can guide you to the right type of loan, mortgage insurance, down payment amount, and estimate closing costs for your new home. Whether it’s a conventional loan, USDA loan, Texas FHA loan, or another option, work with aprofessional to help you research your options and budget appropriately.
Can You Reduce Closing Costs in Texas?
In some cases, buyers can reduce the amount they pay for closing costs—but it takes some work to make that happen. Choose a mortgage company that can help you find the best mortgage rates and lending options to reduce overall costs (including closing costs). The right lender and your real estate agent might also be able to work with the seller to contribute more to the closing costs and offset how much you have to pay.
You can also ask your friendly loan officer at Texas United Mortgage, a top Texas mortgage company, for more help.
No matter your final costs at closing, budgeting is critical to make sure you’re not caught off guard by surprises on closing day or when your first mortgage payment is due!
Work With the Best Mortgage Companies in Texas on Closing Costs It’s hard to know how much you’ll need for closing costs when buying a home. The right mortgage company in Texas can help you prepare by estimating potential closing costs and explaining your financing options. If you’re ready, we’re here to take the next step with you! We hope this blog post has helped you understand a bit more about what to expect when planning your budget and estimating the cost of homeownership. Reach out to Texas United Mortgage today if you have any questions or want to learn more about our services! We can talk with you about FHA loan requirements and also answer the question, “how long does it take to close on a house in Texas?”
When it comes to buying or selling a property in Texas, it’s important to be mindful of all the associated expenses. Closing costs, in particular, can have a significant impact on buyers, so it’s crucial to plan ahead and understand the financial implications. That’s where having an experienced real estate expert can make all the difference, and 99Offers is here to assist you with that. We have top-class real estate experts based on the criteria you set. We provide the following info about each real estate professional: experience, services, number of successful deals, track record, location, email address, website and phone number to contact. We’re here to ensure you have all the information you need as a homebuyer or seller. Our goal is to help you find the most experienced agents who can meet your specific needs.
With 99Offers, you have the convenience of filling out a single form and receiving multiple offers tailored to your individual preferences. No more hassle of searching endlessly for the right agent – we’ve got you covered.
Just let us know more about your dream home in order to personalize the search. Reach out to us today, and we’ll connect you with a real estate expert who can guide you through the process!
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