The sticker price of a home is only part of the total cost of ownership. In North Texas, where property taxes and HOA fees can be significant, understanding the full financial picture before you buy helps you avoid surprises and budget accurately — whether you're purchasing new construction homes or a resale property in McKinney, Frisco, or Prosper.
Closing costs: 2–5% of the purchase price
Closing costs include lender fees, title insurance, escrow deposits, prepaid property taxes, and homeowner's insurance. On a $400,000 home, expect $8,000–$20,000 in closing costs. Some costs are negotiable, and builder incentives may cover a portion — but never assume they'll cover everything.
Texas property taxes: among the highest in the nation
Texas has no state income tax, but property tax rates are above the national average. In North DFW, rates typically range from 1.8% to 2.8% of assessed value depending on the county and school district. On a $400,000 home, that's roughly $7,200–$11,200 annually. New communities may have additional MUD (Municipal Utility District) taxes.
HOA fees: $50–$300+ per month
Most new communities in North Texas have HOA fees that cover common area maintenance, amenities, and community management. These fees vary widely — from $50/month in simpler neighborhoods to $300+/month in master-planned communities with extensive amenities. Factor these into your monthly budget.
Homeowner's insurance: rising costs
Texas homeowner's insurance premiums have been increasing due to weather-related claims. Budget $2,000–$4,000+ annually depending on your home's size, age, location, and coverage level. New-construction homes may qualify for lower premiums due to modern building codes and materials.
Maintenance and reserves
A common rule of thumb is to budget 1–2% of your home's value annually for maintenance — HVAC servicing, roof inspection, plumbing, landscaping, and general upkeep. A $400,000 home might need $4,000–$8,000 per year in maintenance reserves.
Key Takeaway
Understanding the total cost of homeownership — not just the monthly mortgage payment — helps you make confident, informed decisions. I help buyers in North DFW model their complete financial picture before they commit, so there are no surprises after closing.