Upfront Closing Cost to Expect
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Upfront Closing Cost for a VA Purchase
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:
- 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.
- 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.
- 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 $775 to $900 for a single-family home or condo (more for manufactured or 2–4 unit homes). See VA Appraisal Fee Schedule and VA Appraisal timeline
- Termite Inspection: This inspection checks for signs of termite damage or infestation. A termite (WDI) inspection is required on VA purchases in Texas. The buyer or seller can pay for it, as negotiated in the contract; it usually costs $100–$200.
- 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 $50 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.
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