What Closing Costs Look Like For McKinney Buyers

Buying in McKinney and wondering how much cash you need to bring to the closing table? You are not alone. Closing costs can feel murky, especially if you are relocating or buying your first Texas home. In this guide, you will get a clear picture of what closing costs look like for McKinney buyers, typical ranges to budget, Texas-specific fees, and smart ways to manage them. Let’s dive in.

Closing costs, in plain English

Closing costs are the one-time fees and prepaid items you pay at or before closing in addition to your down payment. They include lender fees, title and escrow charges, inspections, prepaid taxes and insurance, and certain government or third-party costs.

As a starting point, most buyers budget about 2% to 5% of the purchase price for closing costs. Your exact amount depends on your loan, the property, and what the seller agrees to pay.

Texas and McKinney specifics

Texas has no statewide real estate transfer tax. That removes one common fee buyers see in other states.

Many McKinney contracts include an option period that you negotiate up front. You typically pay an option fee directly to the seller for the right to terminate within that period. You can review the option-period framework in the Texas Real Estate Commission’s standard forms on the TREC forms and contracts page.

Closings in Texas are usually handled by a title company, not an attorney. Title companies manage escrow, title searches, policies, prorations, and recording.

Property taxes are assessed through the Collin County Appraisal District. Taxes are prorated at closing based on when each party owned the property. Because tax rates vary by city, county, school district, and possible MUDs, your total will depend on the specific property.

What McKinney buyers typically pay

Below are common buyer closing cost categories and industry-typical ranges. Your lender and title company will provide exact figures for your transaction.

Loan-related costs

• Origination or application fee: often 0.5%–1% of the loan amount.
• Discount points: optional; each point equals 1% of the loan amount to reduce your interest rate.
• Underwriting and processing: typically hundreds to low thousands.
• Credit report: usually $25–$50.
• Appraisal: generally $400–$800 for a single-family home in the DFW market.
• Flood certification: about $10–$25.

Title, escrow, and recording

• Title search and commitment: varies by price and title company.
• Title insurance: one-time premiums for owner’s and lender’s policies. Local custom often has the seller pay the owner’s policy, but this is negotiable; buyers commonly pay the lender’s policy and loan-related title costs. Confirm in your contract.
• Settlement/escrow fee: typically several hundred dollars.
• Recording: modest county fees for deeds and deeds of trust; see the Collin County Clerk’s recording fee information for details.
• Courier and wire fees: commonly $25–$75 each when used.

Inspections, surveys, and reports

• General home inspection: about $300–$600, depending on size.
• Termite/pest inspection: roughly $75–$200.
• Survey (if required): $200–$1,000+, depending on lot complexity.
• Specialty inspections (roof, HVAC, sewer scope): variable.

Prepaids and escrows

• Prepaid interest: covers interest from closing date to month-end.
• Homeowners insurance: often the first year’s premium due at or before closing.
• Property tax proration and escrow setup: Texas taxes are paid in arrears; expect proration at closing and initial escrow funding for future bills.
• Mortgage insurance up-front (if applicable): depends on loan program.

HOA, MUD, and city items

• HOA transfer or estoppel fees: commonly $100–$400, depending on association.
• Municipal Utility District transfer fees or special assessments: if the property is in a MUD, you may see related items. Confirm through CCAD records and seller disclosures.
• Utility or city transfer fees: may apply with some providers.

Costs paid before closing

• Earnest money deposit: held in escrow and credited at closing.
• Option fee: often $100–$500, paid directly to the seller for the option period; generally credited at closing if you proceed.
• Home warranty (optional): about $300–$700 for the first year.

How to estimate your exact numbers

Your lender and title company must provide disclosures that clearly outline closing costs. The timelines and documents below help you lock in accurate figures.

• Within three business days of your loan application, your lender provides a Loan Estimate. It lists estimated closing costs, cash to close, and key loan terms. See the CFPB overview of Loan Estimates and Closing Disclosures.
• At least three business days before closing, you receive your Closing Disclosure. This is the final breakdown of costs you will pay.
• Your title company will share a preliminary settlement statement. Compare it with your Loan Estimate and Closing Disclosure to reconcile totals.

Payment timing usually looks like this:

• Earnest money: due after contract acceptance and credited at closing.
• Option fee: typically paid soon after acceptance, per your contract.
• Inspection fees: paid at the time of service.
• Funds to close: wired to the title company by closing day per instructions.

Protect yourself from wire fraud by confirming wiring instructions directly with your title company using a known phone number. Do not rely on emailed instructions without verbal confirmation.

Ways to reduce or shift closing costs

There are several strategies to manage your cash to close. Each has trade-offs, so review them with your lender and agent.

• Seller concessions: you can negotiate for the seller to contribute to your closing costs, subject to loan program limits and market conditions.
• Lender credits: accept a slightly higher interest rate in exchange for credits that reduce cash due at closing.
• Roll costs into your loan: some costs may be financed, which increases your loan balance.
• Shop lenders and title services: compare fees and rate/point combinations by reviewing multiple Loan Estimates.
• Assistance programs: the Texas Department of Housing and Community Affairs offers programs that can help with down payment and closing costs. Review options on the TDHCA homebuyer assistance page. You can also check the City of McKinney Housing and Community Development for local resources.
• Gift funds: many loan programs allow gifts from family for closing funds, with documentation.

For a general primer on closing costs and assistance, see the HUD homebuyer resources.

Quick planning example

If you are buying at a higher price point, the 2%–5% guideline helps you plan. For example, on an $800,000 purchase, a typical range would be $16,000 to $40,000 in closing costs, depending on your loan and what the seller pays. Your Loan Estimate and Closing Disclosure will show the exact figures for your situation.

What to do next

• Get preapproved and request a detailed Loan Estimate from your lender.
• Ask your title company for an estimated settlement statement that includes title insurance and recording fees.
• Plan inspection timing and the option period so you can complete due diligence without rush.
• Review your Closing Disclosure line by line at least three business days before closing. Ask questions about any differences from your Loan Estimate.

If you want a clear, concierge-style process from first tour to final signature, reach out to Patricia Weidler for tailored guidance in McKinney and greater Collin County.

FAQs

How much should a McKinney buyer budget for closing costs?

• Most buyers use 2%–5% of the purchase price as a planning range, then refine with the lender’s Loan Estimate and the title company’s settlement estimate.

Can a Texas seller pay some of my closing costs?

• Yes, seller concessions can cover part of your closing costs, subject to lender and loan program limits and current market conditions.

Who usually pays for title insurance in Collin County?

• Local custom often has the seller pay for the owner’s policy, but it is negotiable; buyers commonly pay the lender’s policy and loan-related title charges.

Are property taxes collected at closing in Texas?

• Taxes are prorated at closing and you may also fund an escrow account for future tax bills, which vary by taxing districts confirmed through CCAD.

When will I see my final closing costs before closing day?

• Your lender must deliver a Closing Disclosure at least three business days before closing, and the title company will provide a final settlement statement for review.