Wondering how much cash you really need to close on a Frisco home? You are not alone. Between lender fees, title charges, taxes, and Texas‑specific items, it can feel confusing. This guide breaks down common buyer closing costs in Frisco, what is negotiable, and how to estimate your cash to close with confidence. Let’s dive in.
What closing costs cover in Texas
Closing costs are the one‑time expenses you pay to finalize your purchase. In Texas, buyers typically see these categories:
- Upfront contract payments: earnest money and the Texas option fee.
- Lender fees: origination, appraisal, underwriting, and credit report.
- Title, escrow, and recording: title insurance, settlement fee, and county recording.
- Prepaids and escrow deposits: insurance, prepaid interest, and initial tax/insurance escrow.
- Third‑party inspections and reports: home inspection, termite/WDI, and survey.
- HOA and local items: transfer or estoppel fees and prorated dues.
- Government or loan program charges: FHA, VA, or USDA program fees if applicable.
Texas does not have a state real estate transfer tax, so you will not see that line item.
Upfront contract payments in Frisco
Texas contracts often include two early payments:
- Earnest money: commonly 1 to 2 percent of the purchase price, held by the title company and applied to your cash to close.
- Option fee: a separate, nonrefundable fee paid to the seller for your option period. Local amounts often range from about $100 to several hundred dollars.
The option period and fee are part of standard Texas contracts. You can review the structure and timelines in the Texas Real Estate Commission forms.
Lender fees you may see
Most buyers pay lender charges unless a seller credit covers them. Typical items include:
- Origination and points: sometimes 0.5 to 1 percent of the loan amount, depending on pricing and whether you buy down the rate.
- Processing, underwriting, and document prep: flat fees that vary by lender.
- Appraisal: often $400 to $900 or more, depending on property type.
- Credit report, flood certification, and tax service: smaller fixed fees.
- Mortgage insurance or program fees: FHA upfront mortgage insurance, VA funding fee, or USDA guarantee fee if applicable. These may be financed or paid at closing.
Your lender will issue a Loan Estimate and a final Closing Disclosure that show these costs and your projected cash to close. See the CFPB guidance on Loan Estimates and Closing Disclosures for what to look for and timing.
Title, escrow, and recording in Collin County
Title insurance and settlement are handled by title companies in this area.
- Owner’s title insurance: protects your ownership. In North Texas, it is common for the seller to pay the owner’s policy premium, but this is negotiable. Premiums are set by the state. Learn how rates are regulated by the Texas Department of Insurance.
- Lender’s title insurance: typically paid by the buyer when you have a mortgage.
- Settlement or escrow fee: paid to the title company for handling closing. Local practice varies on whether this is split or assigned.
- Recording fees: modest county charges for recording your deed and mortgage. For office and fee details, see the Collin County Clerk.
- Survey: several hundred dollars if a new survey is required. Some sellers provide an existing survey; your lender may accept it if it is current.
Prepaids, taxes, and HOA items
Texas relies heavily on property taxes, so tax escrows are often a significant part of buyer prepaids.
- Property tax prorations: taxes are paid in arrears. At closing, you reimburse the seller for the period after closing.
- Initial escrow deposits: your lender will collect a cushion for taxes and insurance, often around two months of each, but your exact amount varies by timing and servicer rules.
- Homeowner’s insurance: you will prepay the first year or fund an escrow deposit as your lender requires.
- Prepaid interest: covers the period from funding to your first payment date.
- HOA items: transfer or estoppel fees and prorated dues, if the neighborhood has an HOA.
For assessment timing and local context, review the Collin County Appraisal District and the City’s tax pages at City of Frisco.
Inspections and third‑party reports
Budget for inspections early, since you usually pay these outside of closing:
- General home inspection and optional specialty checks.
- Termite or wood‑destroying insect report if required.
- Septic or well inspections if applicable.
- Survey if needed and not supplied.
New construction in Frisco: key differences
Builder contracts often work a bit differently than resale transactions:
- Preferred title or lender: a builder may offer incentives tied to using their chosen title company or lender.
- Incentives: builders frequently contribute to buyer closing costs, pay an owner’s title policy, or offer lender credits.
- Additional fees: some deals include lot or utility transfer fees or a warranty escrow.
- Timing: closing may depend on the Certificate of Occupancy or final inspections, with possible holdbacks until items are complete.
Clarify which title company will close and what incentives require. Confirm who pays the owner’s title policy and any HOA transfer fees before you sign.
What is negotiable and program limits
Many items can be negotiated in your contract or with your lender:
- Seller concessions: sellers can credit some or all of your closing costs, subject to loan program caps.
- Title company selection and who pays certain title fees.
- Lender credits: you can often trade a slightly higher rate for a credit that offsets fees.
- Repairs or holdbacks after inspections.
Typical seller credit caps by program include FHA at around 6 percent of price and conventional caps that vary by down payment. Review program rules with your lender and check primary sources like HUD for FHA, VA, and Fannie Mae for conventional guidance.
How to estimate your cash to close
A simple way to build your number is to list each component, then total it up.
- Down payment: purchase price times your down payment percent.
- Closing costs: lender fees, title charges, recording, and settlement.
- Prepaids and escrows: insurance, prepaid interest, and initial tax/insurance escrow.
- Third‑party fees: inspection, appraisal, and survey.
- HOA items: transfer or estoppel fees and prorated dues.
- Subtract credits: earnest money already paid, option fee, and any seller or lender credits.
Rule of thumb: excluding your down payment, buyer closing costs often land around 2 to 5 percent of the purchase price in this market. Prepaids and escrows can add several thousand dollars depending on taxes, insurance, and timing.
Example A: move‑up buyer, 20% down, $500,000
- Down payment: $100,000
- Closing costs: $12,500
- Prepaids and escrows: $4,000
- Earnest money paid at contract: $5,000
- Option fee paid: $300
- Net due at closing: about $111,500 after applying earnest money
This shows how early payments reduce what is due on closing day while still counting in your total cash outlay.
Example B: first‑time buyer, FHA 3.5% down, $350,000
- Down payment: $12,250
- Closing costs: $12,250
- Prepaids and escrows: $3,500
- Earnest money: $3,500
- Option fee: $200
- Net due at closing: about $24,500 after applying earnest money
Your Loan Estimate and Closing Disclosure will show your exact figures. See the CFPB overview of these disclosures for timing and what can change.
Frisco buyer checklist
- Before you offer: review tax history at the Collin County Appraisal District and any HOA fees or rules.
- At offer: plan for earnest money around 1 percent and set an option fee that fits market conditions.
- After contract: compare Loan Estimates from two or three lenders. Ask which fees are lender charges versus third‑party.
- Two weeks out: confirm title company, who pays the owner’s policy, and any seller credits on the contract.
- Three days before closing: review your Closing Disclosure carefully. Verify wire instructions with the title company by phone to avoid wire fraud.
- Closing day: bring a valid ID and any remaining certified funds or send a confirmed wire.
Next steps
You do not have to guess your cash to close. Pair the right contract strategy with a lender who explains fees clearly and title partners who keep timelines tight. If you want a local walkthrough tailored to a specific Frisco home or builder community, reach out to Rich Johnson for a quick plan and negotiability game‑plan.
FAQs
What closing costs do buyers pay in Frisco, Texas?
- Buyers typically pay lender fees, the lender’s title policy, appraisal, inspection and survey costs, recording and settlement fees, and prepaids like insurance and tax escrows. Some items can be covered by seller credits.
How does the Texas option fee work for buyers?
- The option fee is a separate, nonrefundable payment to the seller that buys you an option period to terminate for any reason. It is common in Texas contracts and is addressed in TREC forms.
Who usually pays for owner’s title insurance in North Texas?
- It is common for the seller to pay the owner’s title policy premium in this area, but it is negotiable. Premiums are set by the state through the Texas Department of Insurance.
What makes Frisco buyer prepaids higher or lower?
- Timing, the property’s tax rate, and your insurance premium drive prepaids. Texas taxes are paid in arrears and escrows are sized by your lender, so check the Collin CAD and your Loan Estimate.
Are seller credits allowed with FHA, VA, or conventional loans?
- Yes, within program caps. FHA commonly allows up to about 6 percent, VA permits certain concessions, and conventional limits vary by down payment. Confirm with your lender and see HUD, VA, and Fannie Mae resources.
When will I know my final cash to close amount?
- Your lender must deliver a Closing Disclosure at least three business days before closing, per CFPB rules. It shows your final cash to close, subject to any last‑minute permitted adjustments.
