6 Steps to Buying Your First Home in Texas (And What to Know)

Buying first home in Texas

You’ve diligently saved for a down payment. Now it’s time to go hunting for your first home. While the process can be exciting, it can also be overwhelming. If you’re looking for the right property to call home in Texas, here’s everything to consider.

How to Find Your New Home in Texas

These six steps will simplify the process and help you get more out of buying your first home in Texas.

1. Get Your Finances in Order

When visualizing your home-buying journey, figure out first how much you can afford. Start with assessing how much you have saved for your down payment and what you can manage as a monthly mortgage payment. Ideally, you shouldn’t commit more than 30% of your funds to monthly housing expenses. Other costs to consider when buying a Texas home include:

  • Moving expenses
  • Taxes and insurance
  • Home repairs
  • Closing costs

Keep in mind that the money you’ll use to cover these costs shouldn’t drain your savings set aside for an actual emergency. This fund should cover at least a month of household expenses.

2. Explore Your Mortgage Options

Mortgage options like FHA, USDA, and VA loans are among the best ones that offer a much lower down payment or even none at all. However, several Texas mortgage programs can also make the dream of owning your first home more attainable if you don’t qualify for other mortgage products. Although you’ll need an average credit score of around 662-730 in Texas, you can qualify for many programs with at least 620. Three mortgage homebuyer programs under the Texas Department of Housing and Community Affairs to consider are:

  • My First Texas Home Program
  • My Choice Texas Home
  • Texas Mortgage Credit Certificate Program

Remember that you’re more likely to get approved if you can show you have enough money left after paying housing costs. Thus, you may want to prioritize saving for unexpected expenses.

3. Get Pre-Approved

After having a general idea about your budget and looking at several mortgage options, you should talk to a mortgage lender and get pre-approved. A loan pre-approval letter gives a more accurate estimate of the price range you can afford and strengthens your purchasing power. It can also identify any credit issues you might have and give you time to sort them out.

4. Meet with a Texas Realtor

Experienced real estate professionals make the home-buying process less stressful thanks to their extensive knowledge of the local real estate market. They advise you on different neighborhoods and help you find the property that best meets your needs.

5. Select a Home & Make an Offer

Armed with the information and guidance you need to make a competitive offer, you can now enjoy searching for homes in neighborhoods you like. When buying your first home in Texas, it might be exciting to start looking at every home that catches your eye. However, it’s important to avoid going over your budget at all costs. For the best deal, let a Texas realtor negotiate with the seller on your behalf and help you create a written offer.

6. Complete Appraisal & Finalize Escrow

A property appraisal lets you confirm if the house is in good shape and gives you a heads up if something needs replacing or fixing. If the home needs costly repairs, you can choose to withdraw your offer or further negotiate on the price. Beware that Texas is an escrow state, which means your money and documents will need to be in an escrow account before closing the deal officially.

Tips to Help You Get Started in Texas

There’s a lot to love about Texas, and you’re sure to find a city that fits your budget and lifestyle. You’ll soon discover that everything is indeed bigger in Texas, including the houses. Some of the best things about the Lone Star State you can look forward to are:

  • Affordable real estate
  • Lower taxes
  • Lower electricity bills due to a deregulated electricity market
  • Plenty of opportunity for job growth
  • Amazing local food scene

When it comes to cities, among the more popular ones many families and fresh college grads have come to call home include:

  • Austin
  • Dallas
  • Fort Worth
  • Houston
  • San Antonio
  • Pearland
  • Plano
  • Frisco

These are currently the top places that score high across the board regarding employment opportunities, cost of living, culture, education, safety, and amenities.

Once you move forward with buying your first home in Texas, don’t forget to consider how upcoming changes will affect your budget. By ensuring you have enough to spare and maintaining extra savings, you’ll enjoy everything the state has to offer.