Buyer Closing Cost Calculator in Texas

How is Houzeo’s Texas Buyer Closing Costs Calculator More Advanced?

A closing costs calculator for buyers gives you an estimate of your closing costs while buying a house after deducting local closing costs. Buyer closing costs are typically between 2% and 5% of the purchase value.

At Houzeo, we’ve worked with experts, including Title Agents and Escrow Agents to develop and program our Buyer Closing Cost Calculator. With thousands of properties sold on Houzeo, the Buyer Closing Cost Calculator is updated to reflect closing costs in the most niche of transactions.

Additionally, Houzeo’s Buyer Closing Cost Calculator highlights even the junk fees that you need to be careful of.

How to Estimate Closing Costs Buyer in Texas?

The estimated closing costs for buyers in Texas include several fees like: origination charges, total loan costs, taxes & other government fees, and the down payment.

The equation involved in the process looks something like this:

Total Closing Costs for Buyer = (Origination Cost + Services Borrower Did Not Shop For + Services Borrower Did Shop For) + (Taxes & Other Government Fees + Prepaids + Initial Escrow Payments at Closing + Any Other Fees).

Mortgage rates surpassed 6% for the first time since 2008, and are set to rise further in 2023. If you are planning on purchasing a house, you should analyze the prevalent mortgage rates and their impact on your finances before applying for a mortgage pre approval.

The origination fee related to the mortgage can get up to 1% to 1.25% of the total estimated buyer closing costs. Also, closing costs may vary depending on the state, the type of loan, and the lender.

Estimate closing costs for buyers is an umbrella term that constitutes several other costs. Houzeo’s advanced closing cost calculator for buyers in Texas is a meticulously designed tool that gives buyers an idea of how much they will pay before and during closing.

The buyer’s estimated closing costs worksheet involves two types of costs. i.e, Loan Costs and Other Costs.

Loan Costs

This category consists of fees involved in securing a mortgage.

A. Origination Charge:

The origination charge or origination fee is the amount charged by the lender for administrative costs related to the mortgage application and processing. It consists of two parts:

• 1. Origination fees: A standard fee lenders charge to originate the mortgage.

  Approx Cost: 1% of the loan amount.

• 2. Points: Points are a fee paid in exchange for a lower interest rate. A borrower is essentially buying a lower interest rate by paying more upfront.

  Approx Cost: 0.25% of the loan amount

B. Services Borrower Did Not Shop For:

This is a list of required services chosen by the lender. It may include an appraisal fee, a credit report fee, a flood determination fee, a tax monitoring fee, and a tax status research fee.

• 1. Appraisal Fee: An appraiser is usually hired by the lender and is paid an appraisal fee. They verify the property’s size, features, current condition, and the market price.

  Approx Cost: $300 to $500

• 2. Credit Report Fee: The cost paid by the lender to procure the borrower’s credit report from one of the credit agencies.
  The credit report gives an overview/background of the buyer. It is based on the buyer’s credit card balances, other loans like mortgages and auto loans, and public records like bankruptcy and current/previous court judgments.
  A credit report intends to provide a summary of whether the borrower has been responsible with their credit.

  Approx Cost: $30

• 3. Flood certification: The lenders often require buyers to buy flood insurance in areas that are flood prone.
  FEMA (Federal Emergency Management Agency) provides an elevation certificate that determines the home’s flood risk and helps reduce flood insurance costs.

  Approx Cost: $15 to $20

C. Services Borrower Did Shop For:

These are third-party services that buyers can find on their own. It may include a home inspection fee, title insurance fee, a survey, or other miscellaneous fees.

• 1. Home Inspection (pest, termite, etc): The home inspection fee refers to the service charge usually paid by the buyer to a home inspector to inspect the property’s condition.

  Approx Cost: $250 to $500

• 2. Survey Fee: A fee paid to the surveyor who verifies and evaluates the boundaries, location of fences, walls, gas lines, and so on.

  Approx Cost: $100 to $400

• 3. Title Search and Lenders Title Insurance: A lender’s title insurance policy and home title search protect the lender and buyer in case of an ownership dispute or a title defect.

  Approx Cost: Variable

• 4. Postage/Courier: Courier service fee whenever there is a requirement to send documents like tax documents, closing disclosure, etc.

  Approx Cost: $30 to $80

• 5. Attorney, Closing, and Settlement fees: Fees paid by the buyer to the attorney for reviewing legal documents and agreements during the closing. An attorney, closing agent, or settlement agent helps a buyer and seller close a deal.

  Approx Cost: Variable

• 6. Miscellaneous Services: The lender may have services that don’t fall under any category. Houzeo’s buyer closing cost estimator groups these in miscellaneous services.

  Approx Cost: Variable

Other Costs

This category provides a comprehensive overview of the costs associated with your taxes.

A. Taxes and Other Government Fees:

Fees charged by the county are associated with home prices.

• 1. Recording Fees: The amount paid to the government to record the change of ownership of the home.

  Approx Cost: Variable

• 2. Transfer Tax: The amount of tax assessed on the deed or title transfer based on the home value.
  Either seller or buyer Texas can pay a transfer tax. This depends on the negotiations.

  Approx Cost: Variable. Some states levy transfer taxes, while some do not.

B. Prepaids:

Prepaids are payments made at closing for a specific mortgage expense before it is due.

• 1. Pre-paid Homeowner’s Insurance Premium (12 months): The annual amount you pay your insurance company to keep your policy active.

  Approx Cost: Variable

• 2. Up-front Mortgage Insurance Premium (UFMIP): Your lender may require you to pay for mortgage insurance upfront, depending on the size of your down payment.

  Approx Cost: Variable

• 3. Prepaid Interest Charges for 15 days: The difference between the settlement date and the beginning of the first full month of the mortgage is termed prepaid interest charges.

  Approx Cost: Variable

C. Initial Escrow Payments at Closing:

The amount required to start an escrow account if a lender asks. It is generally paid at closing.

• 1. Escrow Homeowner’s Insurance (for 3 months): Lenders require the buyers to place some amount in the escrow towards the homeowners’ insurance. This covers the costs if the buyer cannot pay for the insurance.

• 2. Escrow Property Taxes (for 3 months): Property taxes are levied by the government based on the local market value of the property. Lenders may require buyers to place some amount in the escrow towards property taxes. This covers the costs if the buyer cannot pay for the property taxes.

  Approx Cost: Variable. These buyer closing costs are the most common ones’ when your down payment is less than 20%. The loan estimate should reflect how much money a buyer has to put in the escrow account.

D. Owner’s Title Insurance:

An owner’s title insurance policy protects the homebuyer and the homeowner if there are problems with the title.

The buyer needs to be protected from financial losses if someone sues the present homeowner and claims the house.

• Approx Cost: Variable. Though, they can cost more than 0.5% of the loan balance.

Use the Texas closing cost estimator for buyers to see all these aforementioned buyer closing costs in one comprehensive sheet.

This buyer closing cost calculator Texas is only for planning and educational purposes.

Disclaimer: All calculations and costs are estimates, and no express or implied warranty is made to consider all potential costs. The Buyer Closing Cost Calculator is not intended to be a replacement for the services of a professional appraiser or financial planner. Before signing any legal document relating to the sale or purchase of a property, please consult a qualified attorney.

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