Closing Costs in Texas

Closing Costs in Texas

Closing Costs in Texas

As with any State, Texas has their own guidelines when it comes to closing costs with regard to real estate loans and refinances. Closing costs in Texas are something that are often overlooked by people looking to either get a primary loan or to refinance. In most cases, their main concern is the actual principal amount of the loan, and often don't even think much about the closing costs until they sit down at the closing table.

Closing costs are generally broken down into two separate and distinct categories, Origination fees and Title and Closing expenses. Each one of these two categories contain several smaller costs which are added up to get to the grand total of closing costs in Texas.

First, let's take a look at origination fees. Origination fees are generally charges that are paid to the broker of the transaction, and include things like application fee, commitment fee, document preparation, funding fee, origination or lender fees, processing, tax service, underwriting, and wire transfer fees. These are all things that the broker that you are working with has to physically do, so the origination fees are a way for them to get paid, and are usually the way that brokers generate a profit.

Now, the title and closing fees are generally paid to the bank directly, although in some cases, the broker also shares in these fees along with the attorney that is involved in the transaction. Some of the fees that are involved with title and closing are appraisal, attorney fee, credit report, flood certification, pest and other inspections, postage, survey, title insurance, and title work which consists of a title search, plat drawing, name search, and any endorsements that are required.

There is a huge amount of effort that goes into actually bringing a loan to the closing table, and that loan being successfully funded. During the process, the broker, an attorney(s), and the bank all have to work hand in hand to make sure that there are no hiccups that happen. In most cases, banks and the brokers will have staff that are dedicated specifically to take care of everything that needs to be done, and to make sure that each thing is done correctly, because if something is done even a little bit wrong, the whole transaction and loan can be voided.

Texas is consistently in the top five most expensive states for closing costs. The best way to figure out your Texas closing costs is to have your broker or banker give you an estimate based on your pre-approved or set loan amount. In fact, the Real Estate Settlement Practices Act (RESPA) requires that your lender provide a good faith estimate, which is an itemized list of your closing costs. You must be provided a copy of this prior to the closing.

The fees associated with closing your home loan can vary greatly so be sure to read the estimate thoroughly and ask questions before you get to the closing table.

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