What are Property Tax Loan Closing Costs?
Closing costs are the fees paid to close a real estate transaction. They are typically associated with a home purchase or refinance, but closing costs are also a normal part of any real estate financing transaction, including property tax loans. 
The Texas Administrative Code, rule §89.601, defines fees allowed for property tax loan closings costs. The following is a list of examples of closing costs for which a property tax lender may charge in connection with a property tax loan. Approved closing costs are: an application fee, an appraisal or inspection fee, a title examination fee, a property survey fee, a fee for flood and plat determinations, a document preparation fee, a closing or escrow fee, a fee for a tax certificate or tax payoff determination, a loan processing fee, an underwriting fee, a fee for obtaining credit reports, and a fee for courier and delivery services.
The administrative code also establishes the maximum closing costs a property tax lender may charge based on the loan amount for single family residential properties. They are:
| Tax Amount Due | Maximun Allowable Closing Costs |
| less than $2,500 | $1,000 |
| $2,500 - $4,999 | $1,250 |
| $5,000 - $7,499 | $1,500 |
| $7,500 - $9,999 | $1,750 |
| $10,000 or greater | Greater of $2,000 or 10% of tax amount |
What Should You Expect to Pay in Closing Costs?
Closing cost can vary greatly by lender; however, they cannot exceed the maximum amounts listed above. According to the Property Tax Lending Study completed by the Office of Consumer Credit Commission in June of 2012, the average closing costs for a residential property tax loan in 2011 was $865.52, while the average closing costs for a commercial property tax loan in 2011 was $1,545.77.
Any reputable tax lender will disclose their closings costs upfront using a Good Faith Estimate, which will provide an itemized list of fees and costs associated with the loan. Additionally, a lender should provide a HUD1-1 or HUD-1A at closing that details the final closing costs of the property tax loan. If your lender is not providing these forms, you might wonder what they are trying to hide.
Low Closing Costs with Property Tax Funding
With closing costs well below the industry average, Property Tax Funding has helped thousands of Texas property owners with low closing cost property tax loans. While not explicitly required in the administrative code, Property Tax Funding believes in providing a Good Faith Estimate at application and a HUD-1A statement at loan closing. This practice ensures no surprises to the borrower and full disclosure of all closing costs and fees associated with the property tax loan.
Property Tax Funding offers a low closing cost guarantee and will roll all closing costs into the loan, thus requiring nothing out of pocket from the borrower at closing. For a no cost, no obligation property tax loan quotation, visit our website or contact Property Tax Funding at 877-776-7391.
