Beyond the Down Payment: What Does It Really Cost to Buy a Home in Texas?

Saving for a down payment is a big milestone. But before you start touring homes in Katy, Fulshear, Richmond, or greater Houston, there is another number worth knowing: how much cash will the entire purchase require?

A comfortable homebuying plan covers three stages: money you may spend before closing, the amount due on closing day, and the cushion you keep after getting the keys. Here is how to build that plan without counting the same expense twice.

1. Start with the down payment, then leave room for everything else

Your down payment is the portion of the purchase price you contribute rather than borrow. The amount you need depends on the financing you qualify for; 20% is not a universal requirement. Ask your lender to explain the down payment, mortgage insurance or program fees, monthly payment, and cash needed for each option you are considering.

Do not choose a down payment by simply emptying your savings account. Decide what needs to remain available for emergencies, moving, and immediate home expenses first. The Consumer Financial Protection Bureau's down-payment guide recommends considering these needs before deciding what you can contribute.

2. Budget for closing costs

Closing costs are separate from your down payment. They can include lender charges, an appraisal, title and settlement services, and recording fees. Your specific charges depend on the loan, property, service providers, and purchase agreement.

The CFPB gives a broad planning range of 2%–5% of the purchase price for closing costs, excluding the down payment. Treat that as an early estimate, not a Texas fee schedule or a quote. Replace it with written figures for your transaction as soon as they are available.

Compare Loan Estimates from lenders using the same loan assumptions. A lower advertised interest rate may come with upfront points or different fees. Ask which services you can shop for and what each charge covers.

3. Understand prepaids and the initial escrow deposit

Some money collected at closing pays expenses in advance rather than paying for a service. Examples include prepaid interest and an insurance premium. An initial escrow deposit may fund the account used for future tax and insurance bills.

These amounts can already be included in the closing-cost total on your loan documents. Do not add them a second time. Ask your lender to walk through the cost breakdown and identify bills you will still pay directly.

4. Know what you may pay before closing

Ask your agent and lender for a timeline of deposits and expenses. Inspections, specialist evaluations, or an appraisal may need to be paid before closing. Whether an expense appears as already paid on the final statement depends on the charge and how it was collected.

Read your contract's deposit requirements, deadlines, and refund conditions carefully. Have the title company explain how eligible deposits will be credited. A deposit credited at closing is money you have already contributed, rather than an extra down payment on top of the agreed total.

5. Separate total purchase cash from the amount still due

Here is a simplified example using entirely hypothetical figures:

• Purchase price: $400,000.
• Down payment: 5%, or $20,000.
• Assumed closing costs, including prepaids and initial escrow: $12,000.
• Combined amount before credits: $32,000.
• Deposit already paid and credited: $4,000.
• Remaining cash due at closing: $28,000.

In this example, the credited deposit is part of the $32,000 total. It does not make the total $36,000. The example assumes no other credits, adjustments, or financed costs and does not include inspections paid separately, moving, or your emergency fund. It is not a loan offer or an estimate for a particular property.

Your Closing Disclosure shows the actual calculation of cash to close. Compare it with your latest Loan Estimate and ask about differences. Any seller or lender credit must be documented and meet the applicable financing requirements; do not budget around a credit that has not been agreed and confirmed.

6. Check the ownership costs for the exact address

Two homes with the same price can have different ongoing costs. Before making your decision, request property-specific estimates for:

• Property taxes and applicable district assessments.
• Homeowners insurance, deductibles, and any separate flood coverage.
• HOA dues and any applicable transfer or other association charges.
• Utilities, maintenance, and repairs identified during your evaluation.

Use the Texas Comptroller's exemption guidance and the local appraisal district to check what exemptions may apply to you. Do not assume your future tax bill will match the seller's bill. Ask whether a new-construction estimate reflects the completed home and whether district taxes are already included in the quoted total.

The Texas Department of Insurance explains that homeowners insurance does not cover flood damage. Discuss separate coverage and address-specific risk with an insurance professional before finalizing your budget.

7. Keep a cushion for life after moving day

Moving services, utility setup, cleaning, window coverings, and a first repair can arrive close together. Make a separate move-in list, distinguish essentials from purchases that can wait, and keep an emergency reserve appropriate to your household.

Then ask yourself: After the purchase is complete, will I have enough flexibility to handle an unexpected expense? The best budget supports living in the home as well as buying it.

Let's build a clearer picture of your next move

I'm Elle (Lum-Awah) Atang with the Tricia Turner Group. If you are considering a home in Katy, Fulshear, Richmond, or greater Houston, I can help you organize property questions and coordinate with your lender, title company, inspector, and insurance professional.

Connect with me to discuss your home search. We can start with your priorities and identify the information you need for a more complete budget.

Still deciding when to buy? Read Buy a Home Now or Wait for Mortgage Rates to Drop?

Sources checked October 28, 2026. Examples are for education; actual costs, financing terms, and contract requirements vary.