Understanding Closing Costs When Buying a Home

When buying a home, most buyers focus on the down payment. But there’s another set of expenses you’ll need to plan for: closing costs. These are the fees and charges due at the closing table to finalize your home purchase.

At The Freund Group at FIV Realty, we make sure buyers in League City, Friendswood, Clear Lake, Houston, and Galveston understand exactly what to expect — no surprises. Here’s a breakdown of closing costs and how you can prepare for them.

📑 What Are Closing Costs?

Closing costs are the additional expenses — beyond your down payment — required to complete a home purchase. They cover services provided by lenders, title companies, appraisers, and local governments.

👉 On average, closing costs for buyers range from 2% to 5% of the purchase price.

Example: On a $350,000 home in League City, you could expect $7,000–$17,500 in closing costs.

🧾 Common Buyer Closing Costs

Here are the most typical fees you’ll see on your closing disclosure:

1. Loan Origination Fees

Charged by the lender to process your mortgage application.

2. Appraisal Fee

Ensures the home’s value matches the purchase price for your lender.

3. Credit Report Fee

Covers the cost of pulling your credit history.

4. Title Insurance & Title Company Fees

Protects against potential ownership disputes and covers document prep.

5. Recording Fees

Paid to the county to record the new deed.

6. Escrow Deposits

Lenders may require several months of property taxes and homeowners insurance upfront.

7. Survey Fees (if required)

Confirms property boundaries.

8. Homeowners Insurance

Buyers must have insurance in place before closing.

9. Prepaid Interest

Covers mortgage interest from closing date until the end of the month.

⚖️ Who Pays for What?

In Texas, certain costs are traditionally split between buyer and seller, though much of it is negotiable.

• Buyers typically pay for lender fees, appraisal, inspection, and insurance.
  
  
• Sellers often pay for the owner’s title policy, though this varies by county and negotiation.
  
  

💡 Tips to Reduce Closing Costs

• Shop around for lenders: Fees can vary widely.
  
  
• Ask for seller concessions: In a buyer-friendly market, sellers may agree to cover part of your closing costs.
  
  
• Check first-time buyer programs: Some offer credits toward closing costs.
  
  
• Roll into the loan: In some cases, closing costs can be financed into your mortgage (though it raises your monthly payment).
  
  

📍 Local Insight: Houston Area

In competitive neighborhoods like Friendswood and Clear Lake, sellers are less likely to cover closing costs, while in higher-inventory markets like Houston and Galveston, buyers may have more negotiating leverage.

✅ Final Takeaway

Closing costs are a key part of the homebuying process, and planning ahead ensures a smoother transaction. By understanding what they include, how much to expect, and how to negotiate, you’ll be fully prepared when it’s time to close.