Surprised by how many line items show up before you get the keys? You are not alone. Closing costs in Texas can feel confusing, especially with local customs that affect who pays what. This guide breaks down buyer closing costs in Midlothian in plain English, shows you what to expect at different price points, and gives you practical steps to estimate and reduce your cash to close. Let’s dive in.
Quick answer: what most buyers pay
Most Texas buyers pay about 2% to 5% of the purchase price in closing costs, not including your down payment. Your total depends on your loan type, lender fees, title and recording charges, prepaid taxes and insurance, whether you need a new survey, and any seller credits.
Two Texas practices matter in Midlothian:
- Sellers often pay for the owner’s title insurance policy, although it is negotiable. Confirm in your contract and title quote.
- Texas does not have a state real estate transfer tax, which keeps buyer costs lower than in many states.
What your closing costs cover
Lender and loan charges
These are the fees to process and underwrite your mortgage.
- Origination or lender fee: usually 0.5% to 1% of the loan amount, or a flat fee.
- Discount points: optional fee to buy down your interest rate. One point equals 1% of the loan amount.
- Underwriting, processing, application: often $300 to $1,000 combined.
- Appraisal: commonly $450 to $800 in the DFW area, depending on property size and complexity.
- Small third‑party checks: credit report, flood determination, and tax service.
You will receive a Loan Estimate within three business days of a completed application and a Closing Disclosure at least three business days before closing. Compare these line by line.
Title, escrow, and recording
Texas title companies handle the title search and settlement.
- Title search, exam, settlement or escrow fee: often $700 to $2,000 depending on the transaction.
- Title insurance: a lender’s policy is typically required. The seller often pays the owner’s policy in Texas, but it is not guaranteed.
- Recording fees: paid to the county to record your deed and loan. In Ellis County, recording is typically charged per document, and totals often fall in the $50 to $200 range per document.
Ask a Midlothian or Ellis County title company for a quote that shows premiums and recording fees specific to the property.
Survey or boundary verification
A residential survey often runs $300 to $1,000. Some lenders accept a recent survey from the seller if it is acceptable and accompanied by a notarized affidavit. If a new survey is required, it is usually a buyer expense unless you negotiate otherwise.
Prepaid items and escrow reserves
These are not fees for services. They are upfront set‑asides for ongoing costs.
- Property taxes: you will reimburse the seller for prorated taxes for the year and fund your escrow account. Texas property taxes are billed annually and can be a large line item.
- Homeowners insurance: lenders typically collect the first year’s premium at or before closing.
- HOA items: some communities charge transfer fees and may collect several months of dues upfront.
Lenders often require about two months of taxes and insurance in escrow plus a small cushion, though rules vary by loan program.
Government and program specifics
- FHA: upfront mortgage insurance premium of 1.75% of the base loan amount, usually financed, plus monthly MIP. Sellers may contribute up to 6% toward buyer costs.
- VA: funding fee applies unless exempt, and seller concessions are generally capped at 4% of the price for certain items.
- Conventional: private mortgage insurance applies with less than 20% down. Seller concession limits vary by down payment and occupancy, commonly 3% to 9%.
Check exact limits with your lender since caps and definitions can change.
Texas‑specific items
- Option fee: you can pay an option fee for an unrestricted right to terminate during the option period. Amounts vary by negotiation and market conditions, often around $100 to $500. It is typically credited back to you at closing if you proceed.
- Earnest money: credited to your cash to close and reduces the amount you wire on closing day.
- No state transfer tax: this helps keep total costs lower than in many other states.
How much to budget in Midlothian
Below are illustrative examples to help you plan. Exact totals depend on your loan, taxes, insurance, title quote, and negotiated terms. These examples assume a conventional loan and that the seller pays the owner’s title policy, which is common in Texas but not guaranteed.
Illustrative example: $325,000 purchase
Estimated buyer closing costs, excluding down payment: about 2.5% or roughly $8,125.
- Lender fees and appraisal: $2,500
- Title, settlement, recording: $1,500
- Prepaid items: $2,000
- Escrow reserves: $1,500
- Survey and other: $625
Notes: An option fee of about $200 is typically paid at contract and credited at closing.
Illustrative example: $425,000 purchase
Estimated buyer closing costs, excluding down payment: about 3.0% or roughly $12,750.
- Origination and any points: $3,500
- Appraisal and credit report: $850
- Title, escrow, recording: $1,900
- Prepaid items including first year insurance: $3,500
- Escrow reserves: $1,500
- Survey, HOA, other: $1,500
Notes: Property tax rates and the insurance premium are major drivers in Ellis County.
Illustrative example: $650,000 purchase
Estimated buyer closing costs, excluding down payment: about 3.5% or roughly $22,750.
- Lender fees and any points: $6,500
- Appraisal and inspections: $1,500
- Title, escrow, recording: $3,000
- Prepaids and reserves: $6,000
- Survey and HOA transfers: $1,750
Notes: At higher prices, premiums and fees scale up. Seller credits can offset costs, subject to loan program limits.
How to estimate your exact cash to close
Use this simple process to dial in your number for a Midlothian home.
- Get Loan Estimates from at least two lenders.
- Compare origination fees, discount points, rate, and the cash to close.
- Ask whether the appraisal is paid upfront or at closing.
- Request a title quote for your specific property.
- Ask a local title company to show both the lender’s and owner’s policy, settlement fee, and Ellis County recording fees.
- Confirm whether the seller plans to pay for the owner’s policy in your contract.
- Check property taxes and insurance.
- Use the Ellis County Appraisal District data to understand the taxing entities and estimated rate for the address.
- Get an insurance quote for the home type and coverage you plan to carry.
- Ask about HOA and survey.
- Request the HOA resale certificate and transfer fee schedule if the home is in an HOA.
- If the seller has a recent survey, ask your lender and title company if it is acceptable.
- Review your Closing Disclosure.
- This arrives at least three business days before closing and shows the final cash to close. Confirm every line item and ask questions early.
Timeline of when you pay what
- Contract day: you deliver earnest money and the option fee. Both are credited at closing, although the option fee is nonrefundable if you terminate.
- During escrow: you may pay for the appraisal and any specialized inspections.
- Three days before closing: you receive your Closing Disclosure showing your exact cash to close.
- Closing day: you wire the remaining funds, then sign closing documents with the title company.
Who pays what in Texas
- Owner’s title policy: often paid by the seller in Texas, including in Midlothian. This is a custom, not a rule. Confirm in your offer and title paperwork.
- Lender’s title policy: typically paid by the buyer, since it is tied to the mortgage.
- Recording: buyers usually cover recording related to their loan and deed, although practice can vary by negotiation.
- Transfer tax: Texas does not have a statewide real estate transfer tax.
Ways to lower your cash to close
- Negotiate seller credits within your loan program limits. Target specific costs like lender fees, title settlement, escrow setup, or prepaid items.
- Consider a no‑point or lower‑point rate option if you plan a shorter hold period.
- Ask the seller to pay the owner’s title policy if local market conditions allow.
- Shop lenders. Small fee differences and lender credits can meaningfully reduce cash to close.
- Time your closing date thoughtfully. A late‑month closing can reduce prepaid interest.
Local tips for Midlothian and Ellis County
- Property taxes drive cash to close. The combination of county, city, school district, and any special districts affects your prorations and escrow reserves. Always verify the latest effective tax rate for the specific address.
- HOAs are common in newer subdivisions. Budget for transfer fees and several months of dues at closing.
- Survey requirements vary by lender and property. Acreage, irregular lots, and additions often require a fresh survey.
- Market conditions shape negotiations. In a strong seller’s market, expect higher option fees and fewer seller credits. In a balanced market, you may secure concessions that cover a significant portion of your costs.
Ready for a clear plan?
When you are buying in Midlothian, having a local advocate who understands Texas contracts, title customs, and Ellis County taxes can save you time and stress. If you want a personalized estimate and a strategy to reduce your cash to close, let’s connect. Reach out to the Krissy Mireles Team and we will guide you from offer to closing with clear numbers at every step. Krissy Mireles
FAQs
How much should a Midlothian buyer budget for closing costs?
- Most buyers should plan on 2% to 5% of the purchase price for closing costs, not including the down payment.
What is the Texas option fee and does it count toward closing?
- The option fee buys you an unrestricted right to terminate during the option period and is typically credited to you at closing if you proceed.
Who pays for title insurance in Texas on a Midlothian home?
- The seller often pays for the owner’s title policy by custom, while the buyer typically pays for the lender’s policy, but this is negotiable.
How are Ellis County property taxes handled at closing?
- You reimburse the seller for taxes accrued for the year and fund your escrow account, then the lender pays bills when due.
What closing costs can a seller pay and are there limits?
- Sellers can pay many buyer costs, but caps apply by loan type, such as about 6% for FHA, about 4% for certain VA items, and 3% to 9% for conventional depending on down payment.
Do I need a new survey, or can I use the seller’s?
- If the seller has a recent acceptable survey with a required affidavit, lenders may accept it; otherwise you may need a new survey, often $300 to $1,000.
What is the difference between prepaids and closing costs?
- Closing costs are fees for services, while prepaids and escrow reserves fund future expenses like taxes, insurance, and prepaid interest.
Which documents show my exact cash to close before closing day?
- The Loan Estimate provides an early estimate and the Closing Disclosure, delivered at least three business days before closing, shows your final cash to close.
