Buying your first home in Dallas and wondering what “closing costs” actually include? You’re not alone. Understanding these fees helps you plan your budget, avoid surprises, and feel confident on closing day. In this guide, you’ll learn what buyers typically pay in Dallas, which items are unique to Texas, and a simple way to estimate your cash to close. Let’s dive in.
What closing costs cover
Closing costs are the one-time fees and prepaids you pay at or before closing, separate from your down payment. In Dallas, your costs usually fall into these buckets:
- Loan-related lender fees
- Third-party services required by your lender
- Title, settlement, and recording fees
- Prepaid items and escrow deposits
- Government and administrative fees
- Possible add-ons like a home warranty or repair escrows
Each home and loan program is different, so your final numbers will come from your lender’s disclosures and your title company’s settlement statement.
Loan fees you may see
These are charges from your lender to approve and fund your mortgage:
- Origination or lender fee. A flat fee or a percentage of the loan amount for processing your loan.
- Application, processing, underwriting, and administrative fees. Internal lender costs that may be itemized.
- Credit report fee. Covers pulling your credit.
- Rate-lock fee. Only if you choose a paid rate lock.
- Discount points. Optional, paid up front to reduce your interest rate.
- Program-specific upfront costs. FHA loans include an upfront mortgage insurance premium; VA loans include a funding fee.
Third-party services for the loan
These are typically ordered by your lender but paid by you:
- Appraisal. Verifies market value; sometimes paid before closing.
- Home inspection and WDI inspection. A general inspection is buyer-selected; wood-destroying insect (termite) inspections are common in Texas and may be required by lenders.
- Survey. If no recent acceptable survey exists, a new one may be needed.
- Flood determination. Confirms if the home is in a flood zone.
Title and settlement costs in Texas
Texas uses title companies to handle closing and issue title insurance. Two title policies exist and serve different purposes:
- Owner’s title insurance. Protects your ownership. In Texas, it is customary for the seller to pay for this, though it is negotiable.
- Lender’s title insurance. Protects the lender. Buyers typically pay this when financing.
Title companies also charge settlement or escrow fees to handle closing. Title insurance premiums in Texas are set by the Texas Department of Insurance, so the base premium is not freely negotiated. You will also see county recording fees for the deed and loan documents.
Important local note: Texas does not have a state or local real estate transfer tax. Buyers still pay recording and title-related charges, just not a transfer tax.
Prepaids and escrow deposits
Prepaids are not fees; they are costs paid in advance to set up your homeowner obligations:
- Prepaid interest. Covers interest from your closing date to the end of that month.
- Homeowner’s insurance. Lenders usually require the first year paid at closing.
- Property tax proration and escrow deposits. Taxes are prorated as of the closing date. Many lenders also collect an initial escrow deposit for taxes and insurance, often a few months’ worth, depending on the program.
- HOA costs. If the home is in an association, plan for transfer fees, move-in fees, and initial dues.
Dallas and Texas customs to know
Local customs affect who pays what and when:
- Owner’s title policy. Customarily paid by the seller in Texas, but confirm in your contract.
- No transfer tax. Texas does not charge a transfer tax at closing.
- Property taxes. Assessed annually and prorated at closing. You are responsible for your share starting the day after closing. Tax rates vary across Dallas County based on the property’s taxing districts.
- WDI inspection. Common in Texas and sometimes required by lenders.
- Surveys. A recent acceptable survey may be reused; otherwise a new one may be required.
- Recording fees. Dallas County recording fees vary by document type and page count. Ask your title company for an itemized estimate or check with the county clerk.
- Homestead exemption. If this home will be your primary residence, you may apply for the homestead exemption after closing. It affects future tax bills, not your immediate cash to close.
How to estimate cash to close
As a starting point, buyer closing costs often range from about 2% to 5% of the purchase price, not including your down payment. Your numbers will depend on your loan program, the closing date, local taxes, and any credits.
Use this simple checklist:
- Down payment
- Price × your down payment percentage.
- Lender and third-party loan costs
- Origination, points, underwriting, credit report, appraisal.
- Title, settlement, and recording
- Lender’s title policy, escrow/settlement fee, recording fees.
- Prepaids and escrows
- First-year homeowner’s insurance, prepaid interest, initial escrow deposit for taxes and insurance.
- Property tax proration
- Your share based on the closing date and the home’s taxing districts.
- Inspections, surveys, HOA
- General and WDI inspections, survey if needed, HOA transfer and dues.
- Credits and concessions
- Seller credits, lender credits, and contract credits.
- Cash-to-close formula
- Cash to close = Down payment + Closing costs (loan + title/recording + third-party) + Prepaids/escrows + Prorations − Credits.
Pro tip: Ask your lender for a Loan Estimate early. It gives loan-specific numbers you can use to budget. Your title company can also provide an itemized estimate for title and recording.
Use the LE and CD to plan
Federal rules require:
- Loan Estimate. Your lender must provide this within three business days of your application.
- Closing Disclosure. You must receive this at least three business days before closing.
Compare your Closing Disclosure to your Loan Estimate and ask about any changes. These documents are your best tools for confirming cash to close before you wire funds.
Timeline, funds, and safety
Here is what to expect as you approach closing in Dallas:
- Scheduling. The three-business-day window after you receive the Closing Disclosure is designed to prevent last-minute surprises.
- Funding the closing. Bring a cashier’s check or wire your funds to the title company, according to their instructions.
- Wire safety. Always confirm wiring instructions directly with your title company by phone using a known number. Wire fraud is a real risk, so verify before you send money.
Smart ways to manage costs
A few practical moves can help you control upfront cash without risking delays:
- Compare lenders and rate options. Weigh discount points versus a higher rate, and ask about lender credits.
- Negotiate credits. Seller credits toward closing costs are possible, subject to loan program limits.
- Confirm existing survey. If a recent acceptable survey exists, you may avoid the cost of a new one.
- Time your closing date. Closing later in the month can reduce prepaid interest for that month.
- Shop homeowner’s insurance. Premiums vary and affect both prepaids and escrow deposits.
Your Dallas guide to a smooth closing
Clear numbers and a steady plan make closing day stress-free. If you would like a personalized estimate or help negotiating credits, our team can walk you through each line item, review your Loan Estimate and Closing Disclosure, and coordinate with your lender and title company.
Have questions about a specific home in Dallas County or the suburbs? Reach out to The Mendez Group for friendly, bilingual guidance from offer to keys.
Ready to get started? Connect with The Mendez Group for a clear plan to closing.
FAQs
What are typical closing costs for Dallas buyers?
- Most buyers can plan for about 2% to 5% of the purchase price in closing costs, excluding the down payment. Your Loan Estimate and title quote will show your exact figures.
Who usually pays for owner’s title insurance in Texas?
- It is customary for the seller to pay for the owner’s title policy in Texas, though this is negotiable and must be confirmed in your contract.
Do Texas buyers pay a transfer tax at closing?
- No. Texas does not charge a state or local real estate transfer tax. You will still see title-related charges and county recording fees.
Will I pay property taxes at closing in Dallas County?
- Yes, taxes are prorated based on your closing date, and many lenders collect an initial escrow deposit for taxes and insurance. The exact amount depends on the property’s taxing districts and your loan program.
What inspections add to buyer costs in Dallas?
- Expect an appraisal, a general home inspection, a WDI inspection that is common in Texas, and a survey if a new one is required.
When will I know my final cash to close?
- Your lender must provide a Closing Disclosure at least three business days before closing. Review it against your Loan Estimate and ask your title company to confirm any prorations and recording fees.
