The number that surprises most McKinney buyers is not the down payment. It is the closing costs that stack up right before you get the keys. If you are wondering what those costs look like in Collin County and how to budget for them, you are not alone. In this guide, you will learn what closing costs cover, what is typical in Texas, how timing affects your cash to close, and realistic ways to reduce what you pay. Let’s dive in.
What closing costs cover
Closing costs are the one-time fees and prepaid items you pay to complete your purchase, separate from your down payment. They include lender charges, third-party services like appraisal and title, prepaid insurance and property taxes, escrow deposits, and any prorations or HOA amounts.
As a planning range, buyers often see total closing costs around 2% to 5% of the purchase price. For example, on a $300,000 home, that is roughly $6,000 to $15,000. On a $400,000 home, that is roughly $8,000 to $20,000. Your numbers will vary based on your loan, lender, property, and exact services.
Texas buyers benefit from one big cost difference. Texas has no state real estate transfer tax. You will still pay Collin County recording fees, but there is no state transfer tax line item.
Under federal TRID rules, your lender must send a Loan Estimate within 3 business days of application and a Closing Disclosure at least 3 business days before closing. Use these forms to compare lenders and to confirm your final cash to close.
Typical McKinney buyer cost breakdown
Amounts vary by loan type, price, and provider. Use these ranges for planning, then confirm with your lender, title company, and agent.
Loan-related fees
- Origination, underwriting, processing: often 0.5% to 1.5% of the loan amount, or a flat fee
- Discount points: optional fee to buy a lower rate (each point is about 1% of the loan amount)
- Credit report and application: about $25 to $75
- Rate lock, wire, and other small lender fees: about $25 to $200 each
Third-party reports and services
- Appraisal: commonly $400 to $800 for a single-family home
- Home inspection: $300 to $600, depending on size and scope
- Wood or pest inspection: $50 to $150
- Survey (if required): $300 to $700+
- Title search and title insurance premiums: several hundred to a few thousand dollars, based on price and policy choices
- Escrow or closing fee to the title company: often a few hundred dollars
Prepaids and initial escrow deposits
- Homeowners insurance (first-year premium): commonly $800 to $2,500+ per year, depending on coverage and property
- Property tax escrows and prorations: initial escrow deposit for taxes and insurance depends on closing date and lender requirements
- Mortgage insurance or FHA upfront mortgage insurance premium, if applicable
Government and county charges
- Collin County recording fees for deed and deed of trust: usually tens to a few hundreds of dollars, depending on document count
- No state transfer tax in Texas
- Any local assessments or municipal liens, if applicable to the property
HOA and community items
- HOA transfer or certification fees, prorated dues, and possible capital contributions, if the property is in an association
Miscellaneous
- Flood certification (about $10 to $30), courier or wire fees, and optional attorney review
Property taxes and escrow in Collin County
Texas property taxes are billed by local taxing entities and collected by the county. At closing, taxes are prorated based on how long the seller owned the home in the year of closing. Your lender will likely set up an escrow account and collect a cushion so future tax and insurance bills can be paid on time. The exact deposit depends on your closing month and the county’s billing calendar. For exact figures, ask your lender, title company, or the Collin County Tax Assessor-Collector.
Title policies and who pays what
Who pays for the owner’s title policy can vary by Texas region and current market conditions. In the McKinney and greater Dallas area, the custom can shift. Do not assume. Ask your agent and your title company how title premiums and settlement fees are typically allocated in your specific contract, then negotiate as needed.
What is paid when
Understanding the cash flow helps you avoid surprises.
- Earnest money deposit: Due after contract execution. Held in escrow and applied at closing.
- Option fee and inspections: Option fee per contract and inspection costs are paid shortly after going under contract.
- Appraisal fee: Often collected around loan processing or shortly after application.
- Loan-related fees: Some are paid at application, many are due at closing.
- Loan Estimate: Delivered within 3 business days of application for early cost planning.
- Closing Disclosure: Delivered at least 3 business days before closing with final numbers.
- Final cash to close: Bring a cashier’s check or wire for down payment plus closing costs, minus credits and deposits.
How much to bring to closing
Your cash to close is the sum of your down payment and total closing costs, minus your earnest money, option fee credits, and any seller or lender credits. As an example, on a $400,000 purchase, 3% in closing costs would be about $12,000, which you would add to your down payment and subtract any credits already paid. Your Closing Disclosure will show the exact amount.
Ways to reduce what you pay
You can often lower your out-of-pocket costs with planning and smart tradeoffs.
- Compare Loan Estimates from at least two lenders to find lower fees or better credits.
- Negotiate seller concessions when the market allows. Loan programs set limits on how much the seller can contribute.
- Consider lender credits. A slightly higher rate can reduce your upfront costs. Ask your lender to model the break-even.
- Shop homeowners insurance and, where allowed, title services.
- Negotiate repairs or seller credits after inspections to offset closing costs.
- If permitted and if you qualify, roll some costs into your loan. This increases your payment, so review the long-term impact.
Help for first-time and VA buyers
Program-based assistance can reduce or cover some closing costs. Explore options with the Texas Department of Housing and Community Affairs (TDHCA) and the Texas State Affordable Housing Corporation (TSAHC), along with any Collin County or City of McKinney resources. VA, FHA, and USDA loans have program-specific rules for seller concessions and mortgage insurance or funding fees. Ask your lender for the current limits and how they affect your cash to close.
Smart questions to ask your team
Bring these to your lender, title company, and agent to get clear answers early.
- What is my total cash to close, and what part is refundable?
- What prepaids and initial escrow deposits will you require based on my closing date?
- Which third-party providers can I shop for, and how do I compare them?
- How are title premiums and settlement fees usually allocated in McKinney right now?
- Are there state or local assistance programs that can help with my closing costs?
Closing day checklist
- Government-issued photo ID
- Certified or cashier’s check or wire confirmation for funds to close
- Proof of homeowner’s insurance binder per lender guidelines
- Contact information for your lender and title company
- Any final documents your lender requested
The bottom line for McKinney buyers
Plan for 2% to 5% of your purchase price in closing costs, then use your Loan Estimate and Closing Disclosure to refine the number. Expect line items for lender fees, appraisal, inspection, title, homeowners insurance, property taxes, and initial escrow deposits. Customs around title insurance and settlement fees can vary in Collin County, so verify who pays what before you write your offer. With the right strategy, you can often secure credits, shop key services, and reduce the cash you need to bring to the table.
Ready to run your numbers and build a smart offer strategy for McKinney? Connect with Amanda Beames for local guidance tailored to your price point and loan type, plus a step-by-step plan from offer to clear-to-close.
FAQs
How much are buyer closing costs in McKinney?
- Budget 2% to 5% of the purchase price, then confirm with your lender’s Loan Estimate and your Closing Disclosure.
Does Texas charge a real estate transfer tax?
- No. Texas does not have a state transfer tax, though you will pay Collin County recording fees for your documents.
How are property taxes handled at closing in Collin County?
- Taxes are prorated based on the closing date, and your lender will likely collect an initial escrow deposit for upcoming tax bills.
Who pays for the owner’s title policy in McKinney?
- It varies by local custom and negotiation. Ask your agent and title company how fees are typically allocated for your contract.
Can a seller pay my closing costs?
- Yes, seller concessions are possible, subject to loan program limits and current market conditions.
When will I know my exact cash to close?
- Your Closing Disclosure must be delivered at least 3 business days before closing and shows the final amount you need to bring.
