Closing costs are the fees and prepaid items you pay to complete a home purchase, in addition to your down payment. Many Texas buyers are surprised by how many items they must pay for. Some are negotiable; others you can shop for. This guide explains what they include, what differs in Texas, and other practical ways to reduce what you bring to closing.
Start with two documents: the Loan Estimate and the Closing Disclosure
Federal rules give you two standard forms that show your costs:
- Loan Estimate. A lender must provide it within three business days after you submit a loan application, which the CFPB says generally means you have provided your name, income, Social Security number, property address, estimated property value, and requested loan amount. It estimates your loan terms, costs, and the cash you will need to close.
- Closing Disclosure. A five-page form with the final details. Your lender must send it at least three business days before closing so you can compare it to your Loan Estimate and ask questions.
Request Loan Estimates from more than one lender. The CFPB calls this the best way to tell whether you have a competitive offer.
What closing costs include
The CFPB’s Loan Estimate groups costs into categories. Here is a plain-English version:
- Lender charges (origination). Fees from your lender, such as application, underwriting, and processing charges. The CFPB says the total matters, since lenders itemize differently.
- Services you cannot shop for. Third-party services the lender requires and chooses, such as an appraisal or credit report. If you have an FHA, VA, or USDA loan, the upfront mortgage insurance premium or funding fee also appears here.
- Services you can shop for. Required services you can choose, such as title services, for which your lender must provide a list of providers.
- Taxes and government fees, such as recording fees.
- Prepaids. Advance payments for ongoing costs, such as the first period of homeowners insurance, property taxes, and interest.
- Initial escrow deposit. Money set aside in your escrow account for future tax and insurance bills.
Your “cash to close” is your down payment plus closing costs, minus any deposit you already paid and any seller credits. Our guide to how much house you can afford in Texas explains how these pieces fit into your budget.
What is different in Texas
Title insurance rates are set by the state
The Texas Department of Insurance (TDI) regulates title insurance. According to TDI, all title companies charge the same premium for a policy, and no one can give you a discount on that premium. In Texas, the premium also covers services such as the title search, title examination, and closing, and you pay it once, at closing. The buyer and seller can negotiate who pays it.
Texas does not require title insurance, but your lender will require a loan policy to protect its interest. An owner’s policy protects you and is a separate choice. In the standard Texas resale contract, the seller furnishes an owner’s policy, and the contract includes a box to indicate whether the seller or buyer pays for it.
Shop escrow and closing fees, not the premium
Because the policy premium is regulated, comparing it between companies will not change the price. TDI says you can shop around for escrow fees and other closing costs, which vary among title agents. It also suggests reviewing any extra charges, such as tax certificates, recording fees, and delivery expenses, and requesting documentation of the actual cost. TDI also says you may choose any title company, and federal law bars a seller from requiring a specific one.
Survey
The standard Texas contract gives options on the survey: the seller can provide an existing survey with an affidavit, the buyer can order a new one, or the seller can furnish one. Which option is used, and who pays, is set in your contract. The lender and title company must accept the survey.
Who pays what is negotiable
The TREC contract lists typical buyer and seller expenses. The form lists items buyers typically pay, such as appraisal fees, loan charges, the loan title policy, recording fees, and prepaids, and items sellers typically pay, such as lien releases, tax certificates, and deed preparation. Escrow fees are split. The contract also lets the seller agree to pay a set amount toward the buyer’s expenses.
Prepaid taxes and homeowners insurance
Property taxes and insurance appear at closing in two ways: prepaid amounts and an initial escrow deposit. In the TREC contract, current-year taxes are prorated between buyer and seller through the closing date. See our guide to Texas property taxes and your monthly mortgage payment for how escrow works. Homeowners insurance is set by the insurer, not the lender, and you choose the company.
Here is how those costs typically break down:
| Cost | Who sets it | Can you shop? |
|---|---|---|
| Lender origination charges | Your lender | Yes, by comparing lenders |
| Title insurance premium (Texas) | Texas Department of Insurance | No, rates are the same |
| Escrow and closing fees | The title agent | Yes |
| Homeowners insurance | The insurer | Yes |
| Property taxes | Local taxing units | No |
Ways to lower your closing costs
1. Compare Loan Estimates for the same loan
Request estimates for the same loan type from several lenders. Compare the lender’s origination charges, the services you cannot shop for, and the total cash to close. Property taxes and homeowners insurance are set outside the lender, so focus your comparison on the items lenders control.
2. Understand lender credits and points
Lender credits and points are two sides of a tradeoff. According to the CFPB, a lender credit offsets closing costs, but you may pay a higher interest rate in exchange. Points are an upfront fee you pay to get a lower interest rate. Ask your loan officer to show you both options and how each affects your total cost over time.
3. Shop where you can
Use your Loan Estimate to see which services you can shop for. In Texas, escrow and other fees are where shopping can matter, since title premiums are fixed. Also shop for homeowners insurance. Do not assume a recommended provider is your best option; the CFPB notes that they may be affiliated with the lender.
4. Negotiate seller help
Seller concessions can reduce what you bring to closing. Rules vary by loan type, and some programs limit certain concessions. For one example, see our guide to VA loans for Texas veterans. Ask your agent whether it makes sense for your situation.
5. Look into assistance programs
Some TSAHC and TDHCA programs offer down payment and closing cost assistance for eligible buyers. Rules, income limits, and credit requirements apply. Our guide to first-time homebuyer programs in Texas explains the options.
6. Think about your closing date
The CFPB suggests considering your closing date, since closing agents can be busier near the end of the month. The date may also change prepaid amounts, such as interest, so ask your loan officer how timing affects your cash to close.
7. Ask about unclear fees
Review every line item. If a fee is vague or looks duplicated, ask the lender or title company to explain it and to provide documentation.
8. Be careful with “no-closing-cost” offers
According to the CFPB, these typically work by charging a higher interest rate or adding the costs to your loan amount. See our guide on refinancing for more on this tradeoff. Credit can also affect your costs, so see our guide on buying with a low credit score.
Use your three-business-day review
When you receive your Closing Disclosure, compare it to your latest Loan Estimate: the loan amount, interest rate, monthly payment, closing costs, and cash to close. Ask the lender to explain any differences. The CFPB says a corrected Closing Disclosure requires a new three-business-day wait only if the APR becomes inaccurate, the loan product changes, or a prepayment penalty is added. Other changes need a corrected disclosure at or before closing. If you have not received a Closing Disclosure three business days before closing, ask for it and do not close until you have reviewed it.
Frequently asked questions
Do I have to pay closing costs out of pocket?
Not always. Seller credits, lender credits, assistance programs, and financing options may cover some costs, but each has trade-offs. Ask your loan officer for the details on your Loan Estimate.
Why did my costs change between the Loan Estimate and Closing Disclosure?
Some costs can change, and there are legal rules about what can change and by how much. The CFPB advises asking your lender for a specific reason.
Is title insurance required in Texas?
Texas does not require it, but your lender will require a loan policy. An owner’s policy is separate and is typically addressed in your purchase contract.
Talk with a local loan officer
A loan officer at The Texas Mortgage Pros can review your Loan Estimate with you, explain each line item, and discuss options to help you manage your cash to close. You can start a pre-qualification or call (877) 280-4833.
Official sources
- CFPB: Loan Estimate explainer
- CFPB: Closing Disclosure explainer
- CFPB: Shop for title insurance and other closing services
- CFPB: TILA-RESPA Integrated Disclosure FAQs
- CFPB: No-cost loans
- Texas Department of Insurance: Title insurance FAQ
- TREC: One to Four Family Residential Contract (Resale), Form 20-18
- TSAHC down payment assistance and TDHCA Homebuyer Program
The Texas Mortgage Pros, NMLS #2665861. This article is for general information only. It is not a commitment to lend or extend credit, and it is not legal, tax, or financial advice. Closing costs vary by transaction, and program rules, contract forms, and regulations are subject to change without notice. All loans are subject to credit approval and other restrictions. The Texas Mortgage Pros is not affiliated with or endorsed by the CFPB, the Texas Department of Insurance, the Texas Real Estate Commission, HUD, FHA, the U.S. Department of Veterans Affairs, USDA, TSAHC, or TDHCA, and this is not a government document. Last verified October 2, 2026.
Equal Housing Opportunity. We do business in accordance with federal fair lending laws.