Costs To Buy a Home in Texas

Do You Know What It Costs To Buy a Home in Texas?

It’s one thing to want to own your own home…it’s another to be able to afford one. Here is a run-down of estimated costs to buy a home in Texas you must consider…

Understanding Down Payments and PMI

PMI – Private Mortgage Insurance

“PMI is a type of mortgage insurance that buyers are typically required to pay for a conventional loan when they make a down payment that is less than 20% of the home’s purchase price. Many lenders offer low down payment programs, allowing you to put down as little as 3%. The cost of that flexibility is PMI, which protects the lender’s investment in case you fail to repay your mortgage, known as default. In other words, PMI insures the lender, not you.

PMI helps lenders recoup more of their money in a default. The reason lenders require the coverage for down payments below 20% of the purchase price is because you own a smaller stake in your home. Mortgagers are lending you more money up front and, therefore, stand to lose more if you default in the initial years of ownership. Loans insured by the Federal Housing Administration, or FHA loans, also require mortgage insurance, but the guidelines are different than those for conventional loans (we’ll cover that later).”

– Source: Investopedia


The following example is for a $360,000 home with a 3.5% interest rate conventional 30-year mortgage. Includes $8000 property taxes and $2000 annual home owners insurance (both are estimates…amounts vary depending on home).



5% Down

10% Down

15% Down

20% Down

Purchase Price





Down Payment





Loan Amount





Monthly Payment:





      Principal & Interest





      Property Taxes





      Home Owners Insurance










Monthly Payment







You can play with a calculator on Investopedia.



All the Home Buying Costs Explained

It’s one thing to want to own your own home…it’s another to be able to afford one. Here is a run-down of estimated costs you must consider when buying a new home.



Please note these are estimates only and will change based on the area where your home is located, price of home, lender requirements, negotiated terms on sales contract, etc.

The following estimated example is for a $360,000 home with 5% down payment with a 3.5% interest rate conventional 30-year mortgage. Includes $8000 property taxes and $2000 annual home owners insurance (both are estimates…amounts vary depending on home).



Estimated Cost

Your Cost

Purchase Price



Down Payment (5%)



Loan Amount




**Earnest Money (typically 1% of purchase price)



**Option Fee (negotiable)



Home Inspection



Termite/Pest Inspection (required by lender)



Pool Inspection (if home has pool)



HVAC Inspection (usually recommended on older homes)



Total to Get Started




Prorated Taxes



Prorated Home Owners Insurance



Pre-Paid Interest



Total Prepaids




Title Insurance (calculate) sometimes paid by the Seller



HOA Transfer Fee + Capitalization Fee



Loan Application Fee



Credit Report Fee for Lender



Appraisal Fee



Loan Origination Fee (negotiable)






Flood Certificate



Doc Prep Attorney Fee



Settlement Fee



Recording Fees



Underwriting Fee



Tax Service Fee



Total Closing Costs




Down Payment



Earnest Money, Option Fee, Inspections






Closing Costs (minus earnest money & option fee already paid)



Sellers Contribution to Closing Costs**



Total Paid at Closing







Moving Costs



Yard Maintenance Equipment



New Appliances (W&D and Refrigerator)



Repairs to Home



Updates to Home



Window Coverings (new construction homes)




You may be able to negotiate for the Seller to pay part of the Closing Costs up to a certain percentage (read more), depending on the loan. This could reduce your total amount to buy a home by a few thousand dollars. However, in a HOT real estate market, most Sellers will not agree to this.


Buying & Selling Real Estate Is a Huge Investment
Don’t You Deserve a Five Star Real Estate Agent?

Sheila Cox

Sheila Cox Realtor
Author of…so you know that I know this area! Winner of Five Star award every year since 2010.


Real estate agents don’t “just” sell houses; we sell a SERVICE to effectively guide home buyers and sellers through the entire real estate transaction, which usually takes several months. We are more like real estate consultants than we are salespeople. That’s probably why 86 percent of all home buyers and sellers choose to hire a real estate agent when buying or selling a home!

Buying or selling a home is not like buying or selling a TV, a computer, or a car. You can’t buy/sell a home on the Internet with a couple of clicks. There are MANY legal aspects, deadlines, and requirements that most people are not trained to handle. What’s more…mistakes along the way can cost you thousands and even hundreds of thousands of dollars. The financial risk is much greater than just about anything else you may buy.

That’s why you need your own dedicated, experienced real estate agent
looking out for YOUR best interests.

Please read the list of my value-added services for home buyers

FREE GUIDES & REPORTS by Sheila Cox, Five Star Realtor

Click Image Below to Download a Guide or Report

katy real estate guide
Katy Relocation Guide
katy market report
Katy Market Report
katy flood report
Katy Flood Report
Katy Schools Report


View Helpful Videos on Sheila’s YouTube Channel

Sheila Cox YouTube Channel

Why You Should Hire Sheila Cox As Your Agent

sheila cox five star realtor5Integrity—I promise to give you candid opinions on all homes and areas so you can make the best decisions. I won’t ignore potential defects that can cost you money, or effect your resale value, in the future…I point them out to you! My job is to protect you, as much as possible, from defective homes while helping you make a sound financial investment. You will get more REAL info from me regarding homes/neighborhoods than you ever had before! (Read client testimonials)

Local Area Expertise—This isn’t just my business…it’s where I work and live (for 20+ years) so I really know the area. I will help you narrow your options and find the best neighborhood for you based on your specifications. For long-term resale value, the neighborhood you choose is just as important as the home you buy. (Download my Ultimate Katy Guide)

Great Pricing Data—I will give you the most in-depth data you have ever seen…to help you make the wisest decisions. This includes a professional CMA when you are ready to purchase a specific home…so you don’t pay too much. You can’t get this level of pricing information anywhere else. (Also see Pricing a Home Correctly)

Premium Customized Home Searches—Yes, you can search on your own, but no other home search available can filter down to the school level…and filter out the subdivisions that may be known to flood. Plus my search includes “Coming Soon” homes not listed on other  websites. (Request a Premium Customized Home Search)

Video Home Tours—If you or your spouse lives out of the state or country, then you will enjoy my detailed video home tours. I have sold multiple homes to out-of-area clients “site unseen” by providing High Definition video walkthroughs of potential homes. My videos show front and back yards, closets, pantries, laundry rooms, and the garage…as well as the entire home. This gives you a complete picture of the house (unlike those silly Matterports). I also point out any potential defects or deferred maintenance that I see. (view sample video walkthrough)

Easier Process—Moving your family (and possibly changing jobs) is stressful enough. I’m your transaction manager and will guide you, step-by-step, through the process so you never miss an important deadline. I assist with inspections, repair negotiations, home warranties, HOA compliance inspections, hazard insurance, surveys, appraisals, title commitment, home warranties, title commitment, and more. (Get Details of My Value-Added Services)

Client Reviews of Sheila

Connect With Sheila