How much will you need at the closing table for a Hutto home, and what exactly are you paying for? If you are a first-time or move-up buyer, it is normal to feel unsure about this part. You will get clear on who usually pays what in Texas, how new construction differs from resale in Williamson County, and how to trim your cash to close. Let’s dive in.
What are closing costs?
Closing costs are the fees and prepaid items due at the end of your home purchase, separate from your down payment. For financed buyers in Texas, a common range is about 2% to 5% of the purchase price. Your exact total depends on your lender, loan type, purchase price, and local items like taxes and HOA fees.
You will see an early estimate on your Loan Estimate and a final tally on the Closing Disclosure, which you must receive at least three business days before you sign. Use these documents to verify your numbers and ask questions.
Who pays what in Texas?
Buyer-paid items
In Texas, buyers typically pay:
- Loan-related fees like origination, underwriting, processing, and optional discount points.
- Appraisal and credit report.
- Home inspections and any specialty inspections you choose.
- Survey if a new one is needed.
- The lender’s title insurance policy if you are financing.
- Recording fees for the mortgage and small admin items like courier or notary, if applicable.
- Prepaid items and escrows: first year of homeowners insurance, prepaid interest, and initial escrow deposits for taxes and insurance.
Seller-paid and negotiable items
In many Texas transactions, sellers pay the real estate commission and often the owner’s title insurance policy. Title and settlement fees can be split or negotiated. Concessions are common, especially if market conditions allow, so you can ask a seller to help with certain buyer costs or a rate buydown.
Transaction basics
- Earnest money: you usually deposit earnest money after going under contract. It is credited back to you at closing.
- Option fee: in Texas, you can pay an option fee for a short unrestricted termination period. It is part of your cash to close but is separate from lender and title fees.
Common buyer fees in Williamson County
Lender and loan fees
- Origination or lender fee: charged for processing your loan. Sometimes a flat fee, sometimes a percentage.
- Discount points: optional, paid to lower your interest rate.
- Application, processing, underwriting, and credit report: smaller admin charges.
- Prepaid interest: interest from your closing date to your first payment date.
- Mortgage insurance: may apply based on your loan type and down payment.
Third-party fees
- Appraisal: an independent valuation for the lender.
- Inspections: standard general inspection plus optional checks like wood-destroying insects or HVAC.
- Survey: confirms property boundaries. If the seller or builder provides a recent acceptable survey, you may not need a new one.
- Title and settlement: in Texas, title companies handle closing. You will see settlement fees and title policies listed on your Closing Disclosure.
- Title premiums: Texas title insurance rates are regulated by the Texas Department of Insurance, which makes premium estimates more predictable by price point.
- Recording fees: paid to the Williamson County Clerk to record your deed of trust and other instruments.
- Transfer tax: Texas has no state real estate transfer tax.
Prepaids and escrows
- Property taxes: Texas taxes are paid in arrears. Your lender typically collects an initial escrow deposit, and taxes are prorated between buyer and seller at closing based on the date you close.
- Homeowners insurance: expect to pay the first year’s premium at closing, and your lender may collect a starting escrow for future payments.
- HOA items: many Hutto neighborhoods have HOAs. Buyers may pay transfer or processing fees, plus any initial capital contributions required by the community or management company.
Local tax notes
Property taxes are set by the Williamson County Appraisal District and local taxing entities such as the City of Hutto, Hutto ISD, the county, and any applicable municipal utility district. Rates vary by address, so check parcel-specific tax rates early, and confirm whether the home lies within a MUD.
New construction vs resale in Hutto
New construction
- Builder incentives: builders often offer closing cost help or rate buydowns, sometimes tied to using their preferred lender and title company. Compare the incentive value against the loan terms.
- Title and vendors: it is common for builders to steer the process toward their preferred title company for efficiency.
- HOA and developer fees: new communities may include transfer fees, initial capital contributions, or impact fees that appear at closing. Many new neighborhoods are in MUDs with separate assessments.
- Inspections and warranties: builders usually provide a warranty, and you can still hire independent inspectors at key stages.
- Survey: builders often provide a recent survey or plat that your lender may accept, which can reduce your cost.
Resale
- Inspections and repairs: you are more likely to order a full set of inspections on resale homes and to negotiate repairs or credits.
- Survey: if the seller’s survey is outdated or unavailable, you may need to order a new one.
- Title matters: older properties can have liens or easements that title companies must review. This can add time and occasionally cost.
- Negotiation norms: sellers commonly pay the owner’s title policy and commission in many Texas markets, but all terms are negotiable.
Example: cash to close on a $400,000 Hutto home
Below is an illustrative scenario to help you see how costs add up. Your actual numbers will depend on your lender, title company, community fees, and the specific home.
Assumptions: purchase price $400,000, conventional loan, 5% down, loan amount $380,000.
Buyer cash-to-close components:
- Down payment, 5%: $20,000
- Loan origination or lender fees, 0.5% to 1% of loan: about $1,900 to $3,800
- Appraisal: about $450 to $800
- Credit report, application, processing: about $50 to $500
- Lender’s title policy premium: regulated in Texas, typically in the low thousands for this price point
- Escrows and prepaids:
- Property tax escrow example: if taxes are about 2% of price, that is $8,000 per year. Two months would be about $1,333.
- Homeowners insurance: first year’s premium often about $1,200 to $2,000.
- Prepaid interest: varies based on closing date.
- Recording and admin: typically a few hundred
- Earnest money: previously paid and credited at closing
- Option fee: paid for your termination option period
Approximate totals:
- Closing costs, excluding down payment but including typical escrows: roughly $8,000 to $15,000
- Total estimated cash to close: down payment $20,000 plus closing costs minus your earnest money credit. In this scenario, that often falls around $28,000 to $35,000.
Notes:
- Title premiums in Texas follow state-regulated rate tables. The exact premium depends on the price and policy type.
- Escrow requirements vary by lender and program.
- Builder concessions, such as $5,000 to $10,000 in closing cost help, can lower what you bring to closing, subject to program limits and builder rules.
Ways to reduce your cash to close
- Negotiate seller concessions: ask the seller to cover specific allowable costs or to buy down your rate.
- Ask for lender credits: accept a slightly higher rate in exchange for a credit toward closing costs.
- Explore assistance programs: look into Texas and federal programs such as VA, USDA, or first-time buyer assistance that can reduce cash needed.
- Shop lenders: compare Loan Estimates to find the best combination of rate, costs, and credits.
- Builder incentives: if buying new, request closing cost help or a rate buydown from the builder.
- Roll allowable fees into the loan: some costs can be financed depending on your program and loan-to-value limits.
- Title cost split: ask the seller to pay or split certain title or settlement fees where custom allows.
- Be selective with optional add-ons: if your lender will accept an existing survey, you may not need a new one. Keep inspections for your protection.
Smart prep for a smooth closing
Timeline and documents
- Get your Loan Estimate early and use it to compare lenders.
- Review your Closing Disclosure carefully. For financed purchases, you should receive it at least three business days before closing.
- Ask your lender and title company to explain any line item you do not recognize.
Wire-safe funds
- Wire fraud is real. Before sending any funds, call your title company using a verified phone number you already have, and confirm wiring instructions verbally. Do not rely on emailed instructions without verification.
What to bring to closing
- Government-issued photo ID.
- Certified funds or wired funds as instructed by title.
- Proof of homeowners insurance, if not already provided to your lender.
- Any documents your lender or title company asks you to bring.
Check taxes and HOA early
- Confirm parcel-specific tax rates through the local appraisal district and taxing entities that apply to your address.
- Verify whether the home is in a MUD and the related assessments.
- Review HOA budgets, transfer fees, and capital contributions that could appear on your final statement.
When you understand what each fee covers and who typically pays it in Texas, you can budget with confidence and negotiate with purpose. If you want a second set of eyes on your estimate or need help weighing builder incentives against long-term costs, the local guidance you get matters.
You can lean on the neighborhood expertise and new-construction coordination experience of Cashmere Realty Group to make smart, confident moves in Hutto. Let’s Grab Coffee and map your path to the closing table.
FAQs
How much cash will I need at closing for a Hutto home?
- A common estimate for financed buyers is 2% to 5% of the purchase price for closing costs, plus your down payment and any option fee. Your Loan Estimate and Closing Disclosure show your exact cash to close.
Who pays title insurance in Texas home purchases?
- The lender’s title policy is typically paid by the buyer when financing. The owner’s policy is often paid by the seller in Texas, but this is negotiable and should be confirmed in the contract.
Can a seller pay my closing costs in Williamson County?
- Yes. Seller concessions are negotiated in the contract and can cover certain buyer costs or a rate buydown, subject to loan program limits.
Are property taxes prorated at a Texas closing?
- Yes. Since Texas property taxes are paid in arrears, your closing will prorate tax responsibility based on the closing date. Your lender may also collect an initial escrow deposit.
What do builders typically cover on new construction in Hutto?
- Builders often offer closing cost assistance or rate buydowns, sometimes tied to using their preferred lender and title company. You may also see HOA or developer fees and MUD-related items on your closing statement.
What is the difference between escrow and earnest money?
- Earnest money is your deposit when you go under contract and is credited at closing. An escrow account holds funds your lender collects for future property taxes and insurance payments.
