How Much Money Do I Actually Need to Close on a House in Texas?

"How much do I actually need to close?" is the question that separates buyers who are ready from buyers who get a surprise at the closing table. The answer is not a percentage you can look up; it is a list of line items, each one sourced and dated, that adds up to the wire transfer on closing day.

The cash-to-close line items

1. Down payment: the difference between the purchase price and your loan amount. The minimum depends on your program, such as FHA's published 3.5 percent minimum for qualifying buyers (HUD program parameters) or zero down on VA and USDA for eligible buyers, and your actual number comes from a dated quote on your file.
2. Lender fees: origination charges, underwriting, and the points you choose to pay, itemized in Section A of your Loan Estimate. These are quoted, not guessed, and they are negotiable.
3. Title policy: Texas title insurance premiums are set by the TDI-approved rate schedule. New rates effective March 1, 2026 reflect a 6.2 percent reduction ordered by the TDI Commissioner on December 19, 2025, and the schedule is at tdi.texas.gov/title/titlerates2026.html. The premium for your price reads straight from that schedule.
4. Prorated property taxes: the seller's share of the current year's tax bill is settled at closing, and your share is collected based on the appraisal district value and the current rate for the days you own the home in the closing year.
5. Insurance prepaids: the first year's homeowners insurance premium, paid at closing, quoted by the insurer for the exact property. Premiums vary by age, condition, and claims history, so no town-wide number exists.
6. HOA prorations and fees: the prorated HOA dues for the closing period plus any required transfer or capital contribution fees, taken from the HOA resale certificate.
7. Other prepaids: prepaid interest from closing day to the end of the month, plus escrow deposits for future taxes and insurance if your lender escrows.
8. Inspections: the general home inspection and any specialty inspections (foundation, HVAC, septic, well, termite) you order during the option period. These are paid directly to the inspectors and are usually outside the Closing Disclosure, so budget them separately.

Then subtract what is already paid: the earnest money you deposited with the contract and any seller concessions negotiated and permitted by your loan program. Those come off the top of the cash you need at the table.

A labeled worked example (illustration only)

This example uses a named price and dated inputs so you can see the line items in order. Every line is explicitly an illustration: your numbers come from your own dated quotes, and I will not invent a total for your file.

The only percentage in the illustration is FHA's published 3.5 percent minimum, because it is the one number with an official source. Everything else is delivered as a dated quote or an official schedule, which is exactly how your real cash-to-close number gets built: line by line, source by source.

Where the real number lives: the Loan Estimate

Within three business days of your application, your lender must give you a Loan Estimate, and Section J of that form shows the estimated cash to close: your closing costs, prepaids, and deposit and credits, added and subtracted into one number. The Closing Disclosure at the end shows the final, binding version, and you get it at least three business days before closing. I read the Closing Disclosure against the Loan Estimate line by line with every buyer, because the whole point of the forms is that nothing should move without you knowing exactly what moved and why.

Frequently Asked Questions