The closing disclosure — formerly known as the HUD-1 Settlement Statement — is the document that details every dollar changing hands in your real estate transaction. For most buyers, it is the first time they see the full picture of what they are actually paying, and it can be overwhelming. Dozens of line items, unfamiliar terminology, and large numbers add up fast. ProGen Real Estate walks every client through this document before closing day so there are no surprises. Here is a breakdown of what each section means and what to look for.
Closing Disclosure vs. HUD-1: What Changed
The TILA-RESPA Integrated Disclosure rule (TRID), which took effect in 2015, replaced the old HUD-1 Settlement Statement with the Closing Disclosure for most residential transactions. The Closing Disclosure is a five-page standardized form that your lender is required to provide at least three business days before closing. The format is different from the old HUD-1, but the information is essentially the same — it shows every cost, credit, proration, and payment in the transaction.
Cash transactions and certain other exemptions may still use a settlement statement rather than a Closing Disclosure, but the content and purpose are the same. For this guide, we will walk through the Closing Disclosure format since that is what the vast majority of El Paso buyers will encounter.
Page 1: The Summary
The first page of the Closing Disclosure provides the big picture. At the top you will see the closing date, the property address, and the names of the buyer, seller, and lender. Below that are two key numbers: your total closing costs and your cash to close. The cash to close figure is the total amount you need to bring to the closing table, usually via cashier's check or wire transfer. This number accounts for your down payment, all closing costs, and any credits or adjustments.
Compare the cash to close figure on your Closing Disclosure with the estimate on your most recent Loan Estimate. If the numbers differ significantly, ask your lender to explain every variance before you sign. Under TRID rules, certain fees cannot increase at all from the Loan Estimate, and others can only increase by up to 10 percent. If a fee has jumped beyond these tolerances, the lender may owe you a credit.
Page 2: Loan Costs and Other Costs
Page two breaks your costs into two major categories. Section A covers origination charges — these are fees your lender charges for processing, underwriting, and funding your loan. Look for items like loan origination fee, application fee, and discount points. If you agreed to pay points to buy down your interest rate, this is where that cost appears. Section B covers services you cannot shop for — typically the appraisal, credit report, and flood certification. Your lender selects these providers.
Section C covers services you could shop for, including title insurance, title search, survey, and pest inspection. In Texas, title insurance rates are set by the state, so there is no variation in that cost regardless of which title company you use. However, other title-related fees like the search and exam fee can vary. Section H covers other costs including property taxes, homeowners insurance, and HOA fees that are collected at closing or escrowed.
Understanding Prorations
Prorations are the adjustments that divide ongoing costs between buyer and seller based on the closing date. In El Paso, the most significant proration is property taxes. Texas property taxes are paid in arrears — meaning the taxes for 2026 are not due until early 2027. At closing, the seller credits you for their share of taxes from January 1 through the closing date, and you take responsibility for taxes from the closing date forward.
For example, if annual property taxes are $5,000 and you close on June 30, the seller owes roughly half the year's taxes — about $2,500. This amount appears as a credit to you on the settlement statement. Your lender will typically escrow for property taxes going forward, collecting a monthly amount with your mortgage payment and paying the tax bill on your behalf when it comes due.
Title Insurance and Title Fees
In Texas, the seller customarily pays for the owner's title insurance policy, which protects the buyer. The buyer pays for the lender's title policy, which protects the mortgage lender. Both appear on the settlement statement. Title insurance rates in Texas are regulated by the Texas Department of Insurance and are the same regardless of which title company handles your closing. On a $275,000 home, the owner's title policy runs approximately $1,800 and the lender's policy approximately $500.
Other title-related charges include the title search and examination fee, document preparation, courier fees, and recording fees. These are typically modest — ranging from $300 to $700 combined. Recording fees are set by El Paso County and cover the cost of officially recording the deed and deed of trust in public records.
Escrow and Prepaid Items
Your lender will require you to prepay certain items and establish escrow reserves at closing. Prepaid items typically include interest from the closing date through the end of that month, the first year's homeowners insurance premium, and any HOA dues. Escrow reserves are additional months of property taxes and insurance held in your escrow account as a cushion. Your lender can require up to two months of reserves above the amount needed to pay the next bill.
These prepaid and escrow items can add $3,000 to $6,000 to your closing costs on a typical El Paso home purchase. They are not fees paid to anyone for services — they are your own money being set aside to cover future obligations. Understanding this distinction helps you see that while your total cash to close might seem high, a significant portion is money you would be paying regardless in the months after closing.
Common Red Flags to Watch For
- Junk fees or duplicated charges — if you see vague line items like 'administrative fee' or 'processing fee' that were not on your Loan Estimate, question them
- Significant increases from your Loan Estimate — certain fees are locked and cannot increase; others can increase by no more than 10 percent in aggregate
- Missing seller credits — if the seller agreed to pay a portion of your closing costs, verify that credit appears on the statement
- Incorrect prorations — verify the per-diem calculation for property tax prorations against your actual tax bill
- Wrong loan terms — confirm the interest rate, loan amount, and loan type match what you were promised
VA Loan Specific Considerations
VA loans, which are common among Fort Bliss buyers in El Paso, have specific rules about which closing costs the buyer can and cannot pay. VA borrowers cannot pay for certain fees including the real estate commission, the seller's title policy, or the termite inspection. There is also a VA funding fee that appears on the settlement statement — this ranges from 1.25 to 3.3 percent of the loan amount depending on down payment and prior VA loan usage. Disabled veterans are exempt from the funding fee entirely.
What to Do Before Closing Day
Request your Closing Disclosure as early as possible — your lender must provide it at least three business days before closing. Review every line item. Compare it against your Loan Estimate. If anything looks wrong, contact your lender and your real estate broker immediately. Do not wait until you are sitting at the title company to raise questions. ProGen Real Estate — TREC #619091 — reviews the Closing Disclosure with every buyer client to ensure accuracy and transparency. Call Josue R. Jimenez at (915) 691-1082 with any questions about your closing documents.
Quick Reference: Typical El Paso Buyer Closing Costs
- Loan origination and lender fees: $1,500 to $4,000
- Appraisal: $400 to $600
- Title insurance (lender's policy): $400 to $600
- Title search, exam, and closing fee: $300 to $700
- Survey: $350 to $500
- Recording fees: $50 to $150
- Prepaid interest: varies by closing date
- Homeowners insurance (first year): $1,200 to $2,500
- Escrow reserves (taxes and insurance): $2,000 to $5,000
- Total typical buyer closing costs on a $275,000 home: $7,000 to $14,000