Upfront Closing Cost to Expect

When buying a home with a VA loan in Texas, there are several upfront costs that buyers should be prepared for. Here’s an explanation of each, along with typical cost ranges:

1. Earnest Money Deposit: This is a deposit made to show the seller that the buyer’s offer is serious and genuine. The amount can vary widely based on the home price and local market conditions, but it typically ranges from 1% to 2% of the purchase price. 
2. Home Inspection: This is an examination of the property’s condition, usually performed by a qualified inspector. The cost varies based on the size and location of the home, but it generally ranges from $300 to $500. 
3. Appraisal: For a VA loan, the appraisal must be conducted by a VA-certified appraiser and will assess the value of the home to ensure it meets or exceeds the loan amount. The cost for a VA appraisal varies by location but usually ranges from $425 to $800. See VA Appraisal Fee Schedule 
4. Termite Inspection: Often a requirement in many states, this inspection checks for signs of termite damage or infestation. In Texas, VA buyers are generally not responsible for this cost, as the seller typically pays for the termite inspection, but if the buyer does pay, it could range from $50 to $150. 
5. Option Fee: In Texas, the option fee is paid directly to the seller for the option period, which typically lasts between 7 to 14 days. During this time, the buyer has the unrestricted right to terminate the contract. The fee is negotiable and can range from $100 to $500, depending on the home price and market conditions. 

These costs are part of the home-buying process and should be factored into the overall budget when planning for a home purchase. It’s important to remember that these are just estimates and actual costs can vary. Consulting with a real estate agent and lender who are experienced with VA loans can provide you with more precise figures based on your specific situation and local market.