Congratulations on taking the first step toward homeownership! Buying a home is an exciting and rewarding experience, but it can also be intimidating if you have never done it before.
Closing costs usually range from 2% to 5% of the price of your Mortgage loan amount, but then you need to also factor in the Down payment amount.
Which can then increase the total amount of cash needed is closer to 7%-9% of the purchase prices.
Texas home buyer loans
First-time buyers can buy with a little as 3% down, but those who put 20% down payments can secure conventional loans, enjoying potential benefits such as low interest rates and exemption from private mortgage insurance (PMI).
Let's look at some of the costs besides the down payment, which can vary.
Use our Calculator to estimate your Cash need,
Common Closing Costs for Buyers
- Down payment, 3-20%, (typical is only 7-8% down of purchase price)
- Loan origination, .5-1% (of the loan amount)
- Points/Discount fees, (pay to receive a lower interest rate, Typically .25-1% of the loan amount)
- Home inspection, $350-$450
- Appraisal, $400-$850
- Credit report $65-135
- Private mortgage insurance premium, Vary, .55%-2.5% of loan amount (based on credit)
- Insurance escrow for homeowner’s insurance, $3000-$4000 a year in Texas (Varies on location)
- Property tax escrow, if being paid as part of the mortgage. (4 months) Use Property Tax Calculator
- Deed recording $25-$70
- Title insurance policy premiums Varies (based our loan amount, set by State)
- Land survey $400-$1500
- Notary fees $65-$125
- Prorations for your share of costs, such as utility bills and property taxes
Also, Check out our seller closing cost calculator as well.
Types of Financing:
Explore different financing options, including:
- Conventional Loans: requiring a 5% down payment and a 620 minimum credit score, with the possibility of stopping mortgage insurance after reaching a 78% loan-to-value.
- FHA Loans: backed by the Federal Housing Administration, featuring a 3.5% down payment and a minimum credit score of 580, with ongoing mortgage insurance until refinancing, moving, or loan payoff
- VA Loans: exclusive to veterans, with no down payment required and varying credit score requirements, offering ongoing mortgage insurance relief after closing.
- USDA Loans: designed for low-to-moderate-income buyers in rural areas, requiring zero down payment and often having a credit score requirement of 640.
- Investor Loans, or DSCR loans.
DSCR (Debt Service Coverage Ratio) loans are commonly used in commercial real estate and investment property financing.
They are particularly beneficial in situations where traditional underwriting criteria might not be met, or where the property generates sufficient income to cover its debt obligations even if the borrower's personal income or credit might not be strong.
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