Third-party fees are charges from companies other than your lender that are required to close your mortgage. These include appraisal fees, title insurance, title search, survey fees, credit report fees, flood certification, and recording fees.
On a typical Texas purchase, third-party fees total $2,000 to $4,000. Unlike lender fees, most of these are standardized. But some like title insurance can be shopping items where costs vary. They appear in Sections C, F, and E of your Loan Estimate.
The key difference: lender fees go to your mortgage company, while third-party fees go to the specific service providers. Understanding which ones you can shop for is the best way to save money at closing.
Common Third-Party Fees Breakdown
Here is a breakdown of the most common third-party fees you will see on your Loan Estimate and Closing Disclosure:
| Fee Type | Typical Cost | Shopping? |
|---|---|---|
| Appraisal | $400-$600 | No |
| Title search | $200-$400 | Yes |
| Owner's title insurance | Texas rates vary | Yes |
| Lender's title insurance | $100-$200 | Yes |
| Survey | $300-$500 | Yes |
| Credit report | $25-$50 | No |
| Flood certification | $15-$25 | No |
| Recording fees | $50-$150 | No |
| Courier / wire fees | $25-$75 | No |
Which Third-Party Fees You Can Shop For
Section C of your Loan Estimate lists services you can shop for. These are the fees where you have a choice in which company provides the service and how much you pay:
- Title company (you can pick your own)
- Title insurance (owner's and lender's policies)
- Survey (compare surveyors)
- Some closing services (settlement agent, notary)
Always ask your lender for a list of approved providers. You are not required to use the lender's preferred vendor for Section C items. Getting your own quotes can save you hundreds of dollars.
Which Third-Party Fees You Cannot Shop For
Section F of your Loan Estimate lists services you cannot shop for. Your lender orders these through providers they have already vetted:
- Credit report (ordered by lender from their provider)
- Flood certification (ordered by lender)
- Tax service fee (ordered by lender)
- Appraisal (lender orders it, even though you pay)
Your lender selects these vendors to ensure they meet investor and regulatory requirements. The fees are typically fixed and not negotiable.
Texas-Specific Third-Party Costs
Texas has its own rules when it comes to third-party fees. Here is what buyers in the San Antonio and Hill Country area need to know:
- Title insurance rates are regulated. The Texas Department of Insurance sets the rates for owner's title policies. You cannot negotiate the rate, but you can shop for which title company you use, which can affect administrative fees and service levels.
- Survey costs vary widely. In Bexar County and surrounding areas, survey costs depend on property size, terrain, and whether a previous survey exists. A simple lot survey might run $300 while a large Hill Country property could be $500 or more.
- Appraisal fees are similar nationwide. In the San Antonio market, appraisal fees typically fall between $450 and $600 depending on property complexity and distance from the appraiser.
- Recording fees are set by the county. Bexar County and neighboring counties set their own recording fees, so these are generally non-negotiable but predictable.
How to Minimize Third-Party Costs
You have more control over third-party fees than you might think. Here is how to keep more money in your pocket at closing:
- Shop for title insurance. Even though Texas sets the base rate, compare ALTA (standard) policies versus more limited policies and ask about title company administrative fees. A good title company can save you money on bundling services.
- Get your own survey quote. If the lender does not require a specific surveyor, get two or three quotes from local surveyors. The difference between providers can be significant.
- Ask about appraisal waiver programs. Some loan programs allow waiving the appraisal for certain properties, saving you $400 to $600. This depends on loan type and property qualifications.
- Compare closing service fees. The settlement agent or attorney handling the closing may charge different rates. Shopping your title company often bundles these services at a discount.
Between shopping the title company and getting your own survey quotes, most buyers can save $300 to $800 at closing with about an hour of phone calls. That is a great return on your time.