Closing Costs You Should Know About

Before You Start Looking, Get Prequalified

Here’s something that trips up a lot of buyers: falling in love with a house before a lender has told them what they can actually afford.

That’s more than an inconvenience. Most sellers won’t consider an offer without proof you can close. That means a written pre-qualification or pre-approval letter from a lender — or, if you’re paying cash, documented proof of funds. No letter, no serious offer.

So before the house hunting starts, the paperwork should. Here’s why, and what it means for your budget once you’re under contract.

Why prequalification comes first

A pre-qualification letter tells a seller one thing: a lender has looked at your finances and believes you can get a loan for this purchase. It’s not a guarantee — that comes later, with full underwriting — but it’s the seller’s evidence that your offer is real.

Without it, your offer competes at a disadvantage, if it gets considered at all. Sellers and their agents see pre-qual letters as the baseline, not the bonus.

Getting prequalified is usually quick — a conversation with a lender, some documents, a letter in hand within a day or two. Do it before you start touring homes, not after you’ve found one.

The other number your lender will explain

Once you’re talking to a lender for that pre-qual letter, this is a good time to ask about closing costs too — the second number that sometimes catches buyers off guard.

Closing costs aren’t one fee. They’re a handful of smaller ones, and knowing what each covers makes the total a lot less mysterious.

• Loan origination and lender fees. This is what it costs your lender to process, underwrite, and fund your loan. Think of it as the paperwork behind the paperwork.
• Third-party services. Your appraisal, your inspection, your escrow setup — these are people outside the lender doing work on your behalf.
• Title and escrow. Someone has to confirm the house is legally, cleanly yours to buy. That’s a title search, title insurance, and escrow services.
• Prepaids and escrow reserves. Homeowners insurance and property taxes, paid upfront so your new escrow account starts with a cushion.
• Taxes and recording. The government’s cut, for recording your deed and mortgage. Small line, but it’s real.

Ready to get prequalified before you start touring homes?
Contact an agent at North Point Realty
— we’ll point you to an experienced lender we trust and walk you through
what buying in Collin County really costs, start to finish.

The part that actually matters

None of these are hidden fees. They’re standard, they’re expected, and every buyer pays some version of them.

What changes is the total — and that depends on your loan type, your lender, and your purchase price. A good lender will walk you through your Loan Estimate early, so no surprises.

That’s the difference between stress and a plan.

Budgeting for it

A simple rule of thumb: closing costs typically run 2–5% of your purchase price. On a $400,000 home, that’s $8,000 to $20,000 — on top of your down payment.

Ask your lender for a Loan Estimate as soon as you’re seriously shopping. It’s free, it’s required, and it turns closing costs from a mystery number into a line item you planned for.

We’re happy to walk you through it

Prequalification and closing costs are two conversations worth having before you tour a single house.