How much cash will you need to close on a home in Central Austin? If you’re budgeting only for the down payment, you may be caught off guard by buyer closing costs. You’re not alone. Many first-time and relocating buyers want a clear, local picture before they write an offer. In this guide, you’ll learn what buyer closing costs include, how much to expect in Travis County, how to estimate them before you shop, and simple ways to reduce what you pay. Let’s dive in.
What closing costs include
Closing costs are the fees and prepaids you pay at settlement in addition to your down payment. They usually cover lender charges, title and escrow services, county recording, and items you prepay like property taxes, interest, and homeowners insurance.
Keep these three items separate in your budget:
- Closing costs: fees and prepaids due at closing.
- Down payment: your equity contribution, separate from closing costs.
- Earnest money: a good faith deposit held in escrow that is credited back to your down payment or closing costs at closing.
How much buyers typically pay
A practical rule of thumb is to budget 2% to 5% of the purchase price for buyer closing costs. Your total in Central Austin will vary by loan type, lender pricing, title policy decisions, prorated property taxes, HOA fees, and any optional inspections or surveys.
For precise numbers, rely on your lender’s Loan Estimate and a title company’s itemized fee worksheet. The Consumer Financial Protection Bureau explains the Loan Estimate and Closing Disclosure timelines, which help you lock in a realistic cash-to-close plan.
What goes into your Austin closing costs
Lender fees
- Origination or application fee, often 0.5% to 1.5% of the loan amount.
- Optional discount points, where 1 point equals 1% of the loan amount.
- Underwriting, processing, and document prep, commonly $400 to $1,500 combined.
- Credit report, typically $25 to $50.
- Appraisal, commonly $450 to $700 for typical single-family homes.
- Lender’s title insurance policy if required by your lender.
- Pest or WDO report if required, about $50 to $200.
Title, escrow, and closing
- Title search and examination.
- Settlement or closing fee, often $300 to $800.
- Owner’s title insurance policy is optional but commonly purchased in Texas. Premiums are regulated statewide. Who pays for the owner’s policy is negotiable in Central Austin.
- Recording and document prep.
- Courier, wire, and notary fees, often $10 to $100 each.
Learn more about regulated title premiums on the Texas Department of Insurance title insurance page.
Prepaids and prorations
- Property taxes. Texas taxes are often paid in arrears, so you will likely reimburse the seller for their share and fund your escrow depending on the closing date.
- Homeowners insurance. First year’s premium is often collected at closing.
- Prepaid mortgage interest from the closing date to your first payment.
- HOA dues prorations or initiation and transfer fees if applicable.
Government fees and taxes
- Texas does not charge a state real estate transfer tax.
- Travis County recording and documentary fees apply and vary by document type. Verify the current schedule on the Travis County Clerk website.
Optional inspections and reports
- General home inspection: about $300 to $700.
- Termite or WDO inspection: about $50 to $200.
- Roof, HVAC, electrical, or plumbing specialists: about $100 to $400 per specialist.
- Sewer scope: about $150 to $500.
- Land survey: about $300 to $1,200.
- Radon test if desired: about $100 to $200.
- Flood elevation certificate if needed: several hundred to over $1,000.
Other potential buyer costs
- HOA transfer or estoppel fees, commonly $200 to $400.
- Recording, wire, and courier fees at closing.
- Attorney fees if you choose to engage an attorney. Texas closings typically use title companies.
How to estimate before you make an offer
Use this simple workflow to build a confident budget:
Start with a rule of thumb. Estimate 2% to 5% of the purchase price for closing costs and add likely prepaids like a full year of homeowners insurance and an escrow cushion for taxes.
Apply with a lender early. After you apply, your lender must deliver a Loan Estimate within 3 business days. Use it to see itemized lender fees, title-related estimates, and prepaids. The CFPB’s guide to the Loan Estimate explains how to read it.
Request a title fee worksheet. Ask a Central Austin title company for an itemized estimate of title premiums, closing fees, and Travis County recording charges.
Use a calculator for a second check. Try a reputable tool like the Bankrate closing costs calculator to sanity-check your numbers.
Explore credits and assistance. Talk to your lender about seller concessions, lender credits, and programs that may help with closing costs.
Sample calculation: $500,000 purchase
Here is a simple example structure for a conventional purchase:
- Purchase price: $500,000
- Loan amount: $400,000 at 80% financing
- Estimated closing costs at 2.5% of purchase: $12,500
- Prepaid homeowners insurance (estimate): $1,200
- Prepaid property tax escrow and prorations (estimate): $2,500
- Estimated total cash to close, excluding down payment: $16,200
- Down payment at 20%: $100,000 (separate from closing costs)
Your earnest money deposit made at contract is credited back to your down payment or closing costs at closing.
Central Austin and Travis County specifics
Owner’s title policy. It is common to purchase an owner’s title policy in Texas, and who pays is negotiable in Central Austin. Premiums are regulated by the state. Confirm local practice with your title company or agent. See the Texas Department of Insurance title insurance overview.
Recording fees. Travis County recording fees vary by document. Confirm current amounts directly with your title company or review the Travis County Clerk website.
Property taxes and prorations. Expect prorations at closing due to Texas taxes being paid in arrears. Your final figure depends on the closing date and current tax schedule.
Market dynamics. In a seller’s market, sellers are less likely to cover buyer costs. In a buyer’s market, seller concessions are more common. Your strategy should match current conditions.
Assistance programs. Qualified buyers can explore statewide help through the Texas Department of Housing and Community Affairs. Locally, check the City of Austin’s housing department for current offerings through the Neighborhood Housing and Community Development programs.
Ways to lower your out-of-pocket costs
- Ask for seller-paid closing costs within loan program limits. Structure the request to fit the market and property.
- Compare lender fees and rates by requesting at least two Loan Estimates.
- Ask about lender credits to offset closing costs in exchange for a slightly higher rate.
- Verify who pays for the owner’s title policy and whether endorsements are needed.
- Time your closing date thoughtfully to manage prepaid interest and tax escrow.
Key questions to ask
Ask your lender
- Can you provide a Loan Estimate and walk me through each fee line?
- What are your origination fees, discount points, and any lender credits available?
- What is the estimated prepaid interest based on my target closing date?
Ask the title company
- Please provide an itemized estimate for title, escrow, and Travis County recording fees for my price point.
- Who typically pays the owner’s title policy in Central Austin and what is the estimated premium?
- What are the current recording fees for the deed and deed of trust in Travis County?
Ask your agent or the seller
- Will the seller contribute to closing costs or pay for any buyer title or escrow fees?
- Are there HOA transfer or estoppel fees we should plan for?
Timeline and what to expect
- After you apply, your lender must provide a Loan Estimate within 3 business days. Use it to set your budget.
- Your Closing Disclosure must be delivered at least 3 business days before closing. Compare it to your Loan Estimate and ask questions promptly. The CFPB explains the Closing Disclosure.
- Plan for certified funds or a wire for final payment. Always verify wiring instructions by phone with your title company to prevent fraud.
Tools and resources
- Learn how to read your disclosures with the CFPB’s guides to the Loan Estimate and the Closing Disclosure.
- Estimate fees with the Bankrate closing costs calculator.
- See statewide title insurance context on the Texas Department of Insurance title insurance page.
- Confirm county recording info through the Travis County Clerk website.
- Explore assistance options at the Texas Department of Housing and Community Affairs and City of Austin Neighborhood Housing and Community Development.
Buying in Central Austin should feel clear and manageable. If you want a tailored estimate for your price point and timing, along with a strategy to negotiate credits and compare Loan Estimates, our family team is here to help. Start a conversation with Allison Winkler to map your numbers and next steps.
FAQs
What are typical buyer closing costs in Central Austin?
- Budget 2% to 5% of the purchase price for buyer closing costs, with totals varying by loan type, title choices, taxes, HOA fees, and inspections.
How are closing costs different from down payment and earnest money?
- Closing costs are fees and prepaids due at settlement, the down payment is your equity contribution, and earnest money is a deposit credited back at closing.
Who usually pays for the owner’s title policy in Austin?
- It is commonly purchased and negotiated locally whether buyer or seller pays. Confirm current practice with your title company or agent.
Can I roll closing costs into my mortgage?
- Sometimes, depending on loan program and lender rules. You can also use lender credits or ask for seller concessions within program limits.
What inspection costs should I plan for in Austin?
- Plan for a general inspection ($300 to $700) and consider termite, roof, sewer scope, and specialist evaluations as needed.
Are there programs that help with buyer closing costs in Austin?
- Yes. Review statewide options through TDHCA and check City of Austin programs for current availability and eligibility.
