How much cash will you really need to close on a home in El Paso? If you’re buying for the first time, it can feel like the fees and acronyms come out of nowhere. You want a clear, local answer so you can budget with confidence and avoid last‑minute surprises.
In this guide, you’ll learn what closing costs include, typical totals for El Paso buyers, who pays what in Texas, and smart ways to reduce your cash to close. You’ll also see simple examples based on common local price points. Let’s dive in.
What closing costs include
Closing costs are the one‑time fees and prepaid items required to complete your home purchase and loan. They usually include lender fees, title and escrow charges, third‑party reports, prepaid insurance and taxes, and county recording fees. These are separate from your down payment.
You typically pay these funds at the closing appointment. Your earnest money deposit is paid earlier and is applied to your down payment or closing costs at closing.
How much El Paso buyers typically pay
A simple rule of thumb for Texas buyers is to plan for about 2% to 5% of the purchase price in buyer closing costs, not counting your down payment. The exact number depends on your loan program, the fees your lender charges, title and escrow costs, and whether you negotiate seller concessions.
El Paso’s median home price is generally lower than many other Texas metros. That means the same 2% to 5% range often results in a lower dollar total here compared with higher‑priced markets.
Quick examples
- Example A: $200,000 purchase price. At 2.5%, closing costs would be about $5,000.
- Example B: $325,000 purchase price. At 3%, closing costs would be about $9,750. If you negotiate a 3% seller concession, the seller could cover up to $9,750 for eligible costs, subject to loan program limits and contract terms.
Keep in mind your actual numbers will come from your lender’s Loan Estimate and the title company’s closing statement.
Who pays what in Texas
Customs vary by area and are always negotiable in your purchase contract, but here are common patterns across Texas.
- It is customary for the seller to pay for the owner’s title insurance policy that protects your ownership. The buyer pays for the lender’s title policy and most loan‑related fees.
- Texas does not have a statewide real estate transfer tax. You will still see local recording and county clerk fees.
- Property taxes and any HOA dues are usually prorated at closing. The seller pays for the portion of the year up to your closing date, and you pay the portion after closing. Your lender may also set up an escrow account with an initial deposit for future taxes and insurance.
Common allocations
Buyer commonly pays:
- Lender origination and processing fees
- Discount points if you choose to buy down your rate
- Appraisal, credit report, underwriting
- Lender’s title insurance and title services
- Escrow or settlement fee (varies by provider)
- Survey if needed
- Home inspections and any specialty inspections
- Prepaid interest, first year of homeowners insurance, initial escrow deposits for taxes and insurance
- HOA transfer or setup fees if applicable
- Recording, courier, and wire fees
Seller commonly pays:
- Owner’s title insurance policy
- Realtor commissions
- Deed preparation and some seller‑side title fees
- Sometimes a portion of buyer closing costs as a negotiated concession
Again, everything is negotiable. Your agent will help write the right terms into your offer.
Typical buyer line items in El Paso
Here are the most common fees you may see on your Loan Estimate and closing statement.
Lender fees and discount points
Your lender may charge an application, origination, underwriting, or processing fee. These can be a flat amount or a percentage. Some lenders advertise low or no origination fee but offset it with a slightly higher rate. Discount points are optional prepaid interest to lower your rate, equal to 1% of the loan amount per point.
Appraisal
Most loans require an appraisal. Typical fees often fall in the $400 to $800 range, with larger or complex properties costing more.
Title services and lender’s title insurance
Title companies research the property’s ownership and issue title insurance. In Texas, title insurance rates are regulated, and the lender’s policy is usually a buyer expense. The buyer often pays title service and escrow fees as well, while the seller customarily covers the owner’s policy.
Escrow or settlement fee
This is the fee the title or escrow company charges to manage your closing. It can be split or allocated by local custom and your contract.
Survey
Your lender may accept an existing survey if it is recent and acceptable. If a new survey is required, cost varies by lot size and complexity and can be several hundred to more than $1,000.
Inspections
A general home inspection is strongly recommended and often ranges around $300 to $600. Pest, roof, foundation, septic, or other specialty inspections add to the total but can protect you from surprises.
Homeowners insurance and prepaids
Lenders require proof of homeowners insurance. You typically pay the first year’s premium at or before closing and prepay interest from closing to the end of that month. If the home is in a flood zone that requires flood insurance, that will affect the premium.
Property taxes, proration, and escrow deposits
In El Paso County, property taxes are based on local rates and assessments. At closing, you will reimburse the seller for your share of the tax year after your closing date. Your lender may also collect several months of tax and insurance payments to start your escrow account.
HOA fees and transfer costs
If the home is in an HOA, expect a transfer or move‑in fee. Amounts vary by community.
Recording, courier, wire, and notary
These are modest third‑party fees to record your deed and mortgage with the county clerk and to move funds securely.
Ways to reduce your cash to close
There are several paths to lower your upfront costs. Each has tradeoffs. Talk with your lender and agent early so you can pick the right mix for your situation.
Seller concessions
You can ask the seller to pay a portion of your closing costs. Limits depend on your loan type:
- FHA loans: up to 6% of the sales price toward closing costs and prepaids.
- VA loans: seller contributions are generally capped around 4% of the sales price for concessions, with some seller payments counted separately. Confirm with your lender.
- Conventional loans: caps depend on your down payment and occupancy. A common cap is 3% when you put less than 10% down, with higher caps at larger down payments. Your lender will advise you on current limits.
Make sure the concessions are written into the contract and allowed by your program.
Lender credits
Some lenders offer a credit that covers part or all of your closing costs in exchange for a slightly higher interest rate. This reduces cash due at closing but increases your monthly payment.
Finance certain fees
Depending on your loan program and loan‑to‑value, you may be able to roll specific fees into the loan amount. This increases the loan and the payment, so weigh the long‑term cost.
Down payment assistance
Texas and local programs can offer grants or second mortgages for down payment and closing costs. Useful places to check include the Texas Department of Housing and Community Affairs, City of El Paso housing programs, El Paso County resources, and HUD‑approved housing counseling agencies. Each program has its own eligibility rules, income limits, and home price caps.
Gift funds
Many loan programs let you use documented gift funds from family or other approved donors to cover part or all of your down payment and closing costs. Your lender will outline documentation requirements.
Credits instead of repairs
If inspections find issues, you can request a credit at closing instead of asking the seller to complete repairs. Credits can lower your cash to close, subject to program rules.
Step‑by‑step plan for El Paso buyers
- Get pre‑approved with at least two lenders and request Loan Estimates so you can compare rates and total closing costs.
- Ask the title company for an itemized estimate of title and escrow fees.
- Confirm who pays for the owner’s title policy in your contract and whether seller concessions are allowed by your loan.
- Review El Paso property tax rates and expect tax proration at closing. Your lender will estimate any initial escrow deposits.
- Budget for inspections and the appraisal early, since you will often pay these before closing.
- If the property is in an HOA, ask for any transfer or setup fees up front.
- Explore assistance programs, gift options, and rate‑credit tradeoffs with your lender to reduce cash to close.
One smart starting move: Get a Loan Estimate from a lender and set up a pre‑approval; ask the lender about seller concessions and local assistance programs to reduce cash to close.
El Paso examples to visualize costs
Here is what the totals might look like on two common price points. Your numbers will vary.
- $200,000 purchase price, 2.5% in closing costs: about $5,000. This might include lender fees and points around $1,500, appraisal and inspections around $700, title and escrow around $1,200, prepaids around $600, recording and other small fees around $200, and tax or escrow deposits around $800.
- $325,000 purchase price, 3% in closing costs: about $9,750. With a 3% seller concession, the seller could cover up to $9,750 of eligible costs, if permitted by your loan and negotiated in the contract.
Pro tips to avoid surprises
- Compare more than just rate. A slightly lower rate with higher fees may cost more upfront.
- Ask about the cost and benefit of discount points before you decide.
- Check whether a prior survey can be reused or if a new one is required.
- Confirm if flood insurance is required, since that affects your prepaids.
- Review your Closing Disclosure as soon as it is issued and ask questions about any line you do not recognize.
Buying in El Paso should feel exciting, not confusing. When you understand what closing costs include and how to manage them, you can focus on finding the right home and negotiating a smart contract. If you want local guidance on fees, concessions, and strategy, reach out to a hometown expert who closes El Paso deals every week. Connect with Shawn Jolley to plan your next steps with confidence.
FAQs
What are buyer closing costs in El Paso and how are they calculated?
- Closing costs are one‑time fees and prepaids for your loan and purchase, and a 2% to 5% range of the price is a common starting estimate for Texas buyers.
In Texas, who usually pays for title insurance on a home purchase?
- It is customary for the seller to pay the owner’s title policy and for the buyer to pay the lender’s title policy and related loan costs, subject to negotiation.
Does Texas charge a real estate transfer tax at closing?
- No, Texas does not have a statewide transfer tax, though you will pay local recording and county clerk fees.
How do property taxes work at closing in El Paso?
- Taxes are prorated, so the seller pays up to your closing date and you pay after; your lender may also start an escrow account with an initial deposit.
Can a seller help pay my closing costs in El Paso?
- Yes, seller concessions are common but limited by loan program rules, so ask your lender about the cap for FHA, VA, or conventional loans.
What are the best ways to lower my cash to close as a first‑time buyer?
- Combine negotiated seller concessions, lender credits, assistance programs, and allowed gift funds, and compare Loan Estimates from multiple lenders.
