Closing costs in Fort Bend Texas are the required fees and other costs that home buyers and sellers are mandated to pay to complete the sale/buying of homes. Closing in real estate means the period of time when the title of the home is transferred from the seller to its new owner – the buyer.
Though, both the home seller and the buyer are responsible for closing costs, the buyer incurs most of the cost.
Closing Costs in Fort Bend is 1.70% of the entire cost of the property. Typically, Fort Bend’s average closing cost is $3,880, while the median home value is $333,300. As such, Fort Bend has one of the lowest closing costs in the entire Houston area.
That said, closing costs in Fort Bend are not added to or deducted from the actual cost of the home or the down payment. Rather, closing costs are often calculated as a separate fee which is often within 2 to 5 % of the total cost of the home. But in Fort Bend, it is 1.70%.
So, if you’re interested in buying a home in Fort Bend, Texas, what fees and items should you expect in your closing costs?
Closing Costs In Fort Bend
Here are the key items (fees and costs) that are included in Fort Bend, Texas closing costs worksheet:
1. Flood Certification
This closing cost is the certification that affirms the condition of a property in a flood zone. Flood certification is allotted by the Federal Emergency Management Agency (FEMA).
2. Tax Service Fee
This is a lawful closing cost that is assessed and collected by a lender to ensure that a borrower keeps making payments for his or her property taxes at the right time. This fee was established to protect lenders and their access to collateral in the event that a borrower defaults.
3. Title Search and Lenders Title Insurance
This is the fee that is associated with asking a company to conduct a research about a property’s title. In addition, it includes an insurance policy that protects the lenders in case it is later discovered that the title contains some errors.
4. Underwriting and Processing Fee
This is the fee you pay to your lender for them to underwrite your loan. The underwriting process requires that the lenders carry out some research to ascertain the financial data you provide such as your credit score, income and employment etc. before your loan is authorized.
5. Origination Fee
This is the amount of money you pay to your mortgage company to cover for all the administrative costs associated to your mortgage application and processing.
6. Credit Report Fee
This is the fee you pay to your lender to enable them pull your credit reports from the three key credit bureaus; Experian, TransUnion and Equifax). Nonetheless, some lenders may decide to waive this fee because they get discounts from these credit bureaus.
7. Appraisal(s) Fees
This is the fee you pay to the lender to conduct an appraisal to determine the value of the home you intend to buy.
8. Owner’s Title Insurance Policy
This policy was created to protect the interest of the buyer as a borrower in the event that the title contains any error or flaw. For example, if anyone disputes your claim as the owner of the property, this is the policy that will legitimately protect you.
This is an objective assessment of the property to establish its specific boundaries and things like encroachments, gas lines, easements, roads, and walls etc.
10. Escrow Property Taxes
Refers to the amount of money that is reserved to cover for the cost of property taxes. The money is held by a third party until the real estate deal is completed. Property taxes are government levies which are based on the market value of the property (as assessed by a local tax assessor).
This is the required fee that is paid to the third party who oversees the closing of the real estate transaction. Such third party could be an attorney, the title company, or an Escrow company.
12. Recording Fee
This is the payment you have to make to create a public record of the property you’re purchasing.
13. Transfer Tax
Refers to the tax levied on the property title transfer from the seller to the buyer (the new owner).
14. Lead-Based Paint Inspection
There’s only one way to find out if the home you intend to buy has a harmful lead based paint and that’s to hire a certified inspector. This is the fee you have to pay for hiring such inspector.
15. Brokerage Commission
The home seller is often required to pay this fee as part of the closing costs. As soon as the seller makes the payment, the real estate agents split it among themselves. The brokerage commission is typically about six percent of the home’s sale price.
Key Things To Note About Closing Costs in Fort Bend, Texas
Paying for your closing costs in Fort Bend out-of-pocket as a one-time cost is one of the most effective methods of making the payment.
You can as well roll up your closing costs into your mortgage if your lender allows such. However, if your lender agrees, you’ll have to keep paying interests on the costs for as long as the mortgage lasts.
To figure out what’s included in your closing costs in Fort Bend or omitted, your lender will add your closing costs to the Loan Estimate they will send to you when you applied for the mortgage.
Furthermore, your lender will indicate your closing costs in the Closing Disclosure document you’ll receive few days before the closing.
It’s your job to review and compare both documents to ensure that the items they both contained match. Also, you should ask questions if you need further explanations.
In addition, scheduling your closing to the end of the month will make it easier for you to reduce your prepaid daily interest charges. Your lender should be able to help you figure out the amount you can save by closing at the end of the month.
Property taxes are among the key things to consider when you intend to buy a home in the state of Texas. The state’s average effective property tax rate is 1.83% and rated sixth highest across the country.
However, the state of Texas has no income tax or state property tax. As such, most of the local government services like road systems, schools, and libraries are funded with locally administered property taxes.