Closing Costs are the fees associated with the buying or selling of a home. Certain fees are automatically assigned to either the buyer or the seller; other costs are either negotiable or generally accepted.

Buyer's closing costs
When a buyer applies for a loan, lenders are required to provide them with a good-faith estimate of their closing costs. The fees vary according to several factors, including the type of loan they applied for and the terms of the purchase contract. Likewise, some of the closing costs, especially those associated with the loan application, are paid in advance. Some typical buyer closing costs include:

• The down payment
• Loan fees (points, application fee, credit report)
• Prepaid interest
• Inspection fees
• Appraisal
• Mortgage insurance (typically 1 years premium plus an escrow of 2 months)
• Hazard insurance (typically 1 years premium plus an escrow of 2 months)
• Title insurance
• Documentary stamps on the note (usually nominal)
  
  Mortgage Broker Checkup- see what the avg. closing cost should be
  
  
  

Seller's closing costs
If the mortgage on the home has not yet been paid in full, the Seller's
most important closing cost is satisfying the remaining balance of their loan. Before the date of closing, the escrow officer will contact the seller's lender to verify the amount needed to close out the loan. Then, along with any other fees, the original loan will be paid for at the closing before the seller nets any proceeds from the sale. Other seller's closing costs can include:

• Broker's commission
• Transfer taxes
• Documentary Stamps on the Deed
• Title insurance
• Property taxes (prorated)

Negotiating Closing Costs
In addition to the sales price, buyers and sellers frequently include closing costs in their negotiations. This can be for both major and minor fees. For example, if a buyer is particularly nervous about the condition of the plumbing, the seller may agree to pay for the house inspection.

Likewise, a buyer may want to save on up-front expenditures, and so agree to pay the seller's full asking price in return for the seller paying all the allowable closing costs. There's no right or wrong way to negotiate closing costs; just be sure all the terms are written down on the purchase contract.

Prorations
At the closing, certain costs are often prorated (or distributed) between buyer and seller. The most common prorations are for property taxes. This is because property taxes are typically paid at the end of the year for which they were assessed.

For example, if a house is sold in June, the sellers will have lived in the house for half the year, but the bill for the taxes won't come due until the following year! To make this situation more equitable, the taxes are prorated to account for the time the sellers occupied the home up till the date of closing. In this example, the sellers will credit the buyers for half the taxes at closing or the Seller may choose to pay the tax assessor before directly before closing date.

1)Texas Dept of Housing & Community Affairs has two short term loan programs to be repaid with federal tax credit.
 2)Mortgage Assistance Program 5% of 1st lien amount up to $6K, interest free for 120 days.
3) Down Payment Assistants Program has a loan of 5% up to $7K 90 days interest free.
see MyFirstTexasHome.com