Ready to buy a home in the Lone Star State?
With abundant sunshine and a zero state income tax, Texas is one of the most desirable states for those who seek an active lifestyle with financial benefits. Your dream home could be a modern single-family house in Dallas or a beachfront condo in Galveston.
Whether you’re a first-time homebuyer or new to Texas’ housing market, this guide will teach you everything you need to know. We’ve broken down the entire home-buying process into 13 actionable steps.
Key Takeaways:
- Get Pre-Approved ASAP: In a buyer’s market like Texas, a pre-approval letter helps you stand out.
- Save Thousands with Assistance Programs: Programs like “My First Texas Home” offer low-interest 30-year mortgages and up to 5% in down payment assistance, often at a low interest rate. Ensure you research assistance programs thoroughly.
- Don’t Skip Texas-Specific Inspections: In Texas, a 4-Point Inspection is required for homeowners’ insurance for homes built before the 1990s. You can get up to a 20% discount on insurance by elevating your home above flood levels.
- Ask for Credits, Not Repairs: If the inspection has issues, ask the seller for credit at closing. This allows you to hire your own contractors and prevent closing delays.
- Protect Your Investment and Your Wallet: If you live in Central and North Texas, get flood insurance, as standard policies don’t cover it. Don’t forget to file for the Homestead Exemption to save up to $100,000 on your home’s taxable value.
How to Buy a Home for the First Time in Texas: 13 Steps!
This step-by-step guide walks first-time home buyers in Texas through everything, from assessing finances and budgeting for a down payment to choosing the right mortgage. These 13 steps make the Texas real estate process clear, simple, and manageable.
Step 1: Assess Your Finances
As a first-time home buyer in Texas, the two factors that should matter the most to you are your credit score and Debt-to-Income (DTI) ratio. Additionally, you must also consider how much you can afford for a down payment, a monthly mortgage, taxes, and insurance.
What Is Your Credit Score?
A credit score is a three-digit number that indicates your creditworthiness to lenders. The minimum credit score to buy a house in Texas depends on the type of mortgage you get.
Minimum and Ideal Credit Scores by Loan Type
| Loan Type | Minimum Score | Ideal Score |
|---|---|---|
| FHA | 500 (10% down) | 580+ (3.5% down) |
| Conventional | 620 | 740+ for best rates |
| VA | No VA minimum; most lenders need 620 | 680+ for best rates |
| USDA | No set minimum; most lenders require 620 | 640+ for best rates |
Portfolio mortgage loans are easy to qualify for. Here, the credit score needed to buy a house starts at around 580. VA loans are available only to veterans and active-duty service members, and require a score of 620. FHA loans also accept scores as low as 580. They are good for buyers with lower credit scores looking for houses in Texas.
When purchasing property in Texas, you can check your credit score using several reliable methods. Most of them are free and will not harm your score:
- Annual Credit Reports: Federal law entitles you to one free credit report every 12 months from each of the three major credit bureaus: Equifax, Experian, and TransUnion. These can be accessed through the official, government-authorized website, AnnualCreditReport.com.
- Credit Monitoring Services: Many banks, credit card issuers, and financial service apps provide complimentary and regular access to the FICO score. This is a convenient way to track your credit health over time.
Knowing how to repair your credit score is important to get better mortgage rates. If you’re a first time home buyer in Texas, here’s what you need to do:
- Pay down credit card balances and make all payments on time.
- Avoid opening multiple new accounts quickly.
- Consider becoming an authorized user on a family member’s account with a good history.
- Monitor your score regularly to track progress.
How to Calculate Your Monthly Mortgage Payment in Texas?
As a first time home buyer in Texas, knowing your average mortgage payment helps you plan your budget. Your total payment includes 4 key components, often called PITI:
- Principal and Interest: This is a major chunk of your payment, covering the amount you borrowed (principal) and the cost of borrowing (interest). It’s determined by your loan amount, interest rate, and loan term.
- Taxes: In Texas, property taxes are based on your home’s appraised value. The lender holds these funds in an escrow account and pays the tax on your behalf.
- Insurance: Lenders require you to have homeowners’ insurance to protect the property. The annual premium is usually divided by 12 and added to your monthly payment, also managed through the escrow account.
Apart from PITI, your monthly payment may also include Private Mortgage Insurance if your down payment is less than 20% and HOA fees.
What Is a Debt-to-Income (DTI) Ratio?
Your debt-to-income ratio shows how much of your monthly income goes toward debt payments, including mortgage, car loans, credit cards, and student loans. To calculate it, add all monthly debts and divide the total by your gross pre-tax monthly income.
A high DTI can prevent you from qualifying for a mortgage, as it shows that you struggle to manage your debt. For the best mortgage rates and a higher likelihood of mortgage approval in Texas, aim for a DTI ratio of 36% or lower.
💡 You can still qualify for a loan in Texas despite a high DTI if you have compensating factors like a strong credit history, significant cash reserves or savings, stable long-term employment, etc.
Recommended DTI Ratios by Loan Type
| Loan Type | Recommended DTI Ratio | With Compensating Factors |
|---|---|---|
| Conventional | 43% back-end | Up to 50% |
| FHA | 43% back-end | Up to 57% |
| VA | 41% | Can exceed 50% with the residual income test |
| USDA | 41% back-end | 44% with strong credit |
To improve your DTI ratio for a mortgage, you can either reduce your monthly debts or increase your verifiable income.
- Pay Down Debt: Use a tax refund or bonus to clear smaller loans, or consolidate multiple debts into a single loan with a lower monthly payment.
- Increase Verifiable Income: Ask for a raise, take on part-time work, or start a side business. Include all consistent income sources on your application, such as bonuses or commissions, but remember that lenders require a two-year history for secondary income.
- Adjust Your Housing Budget: A larger down payment reduces your loan amount and your monthly mortgage payment. You can also consider a lower home purchase price to keep your future housing costs down.
Step 2: Budget for Your Down Payment and Closing Costs
You should set aside money for the down payment and closing costs. Texas’ first time home buyer programs help make homeownership accessible and affordable.
How Much Down Payment Does a Texas First Time Home Buyer Need?
Typically, the down payment on a house for a first time home buyer in Texas ranges from 3% to 20% of the property’s price. However, it can vary based on the loan type. FHA loans require just 3.5% down, while some conventional loans allow a 3% down payment.
To help with these upfront costs, there are many state and local down payment assistance programs in Texas. They provide grants or loans to cover these expenses.
👉 First-Time Home Buyer Programs in Texas: Find out which is the #1 downpayment assistance program in the Lone Star State.
How to Estimate Closing Costs in Texas?
Closing costs are fees and expenses paid at closing beyond your down payment. Typically, buyer closing costs in Texas usually range from 2% to 5% of the home’s price. So, for a $339,100 home, buyers might pay $6,782 to $16,955.
These fees cover lender charges, appraisals, inspections, title insurance, taxes, agent commissions, and recording fees when buying a property in Texas.
Step 3: Get Pre-Approved for a Mortgage
Secure your financing early by getting pre-approved for a mortgage as a first time homebuyer in Texas. This step helps you understand your budget and strengthens your offer when buying a house.
How to Get Pre-approved as a First Time Home Buyer in Texas?
You need to follow these steps to get pre-approved when buying a house in Texas:
- Gather Financial Documents: Provide proof of income (recent pay stubs and W-2s), tax returns (last two years), asset statements, debt information, and a government-issued ID. For homes in a flood zone, lenders may require flood insurance before approval.
- Choose a Lender and Apply: Compare lenders in Texas and submit a mortgage application to get the best rates and terms.
- Receive Pre-Approval Letter: The lender verifies your info and issues a letter stating your approved loan amount, usually valid for 30–90 days.
A mortgage preapproval turns you from a casual house hunter to a serious buyer in Texas, as it:
- Strengthens Your Offer: 86% of the sellers prefer buyers with a pre-approved mortgage. For the strongest position, ask for a fully underwritten pre-approval, where the lender has already verified all your documents.
- Defines Your Budget: It clarifies exactly how much you can afford, allowing you to focus your home search on a realistic price range.
- Speeds Up Closing: With much of the financial vetting already completed, the mortgage process is streamlined once your offer on a home is accepted.
Yes, you can get pre-approved and even buy a home with bad credit in Texas. However, your loan options may be limited. You can also expect higher interest rates with poor credit.
Step 4: Choose the Right Mortgage
As a first time homebuyer in Texas, assess your finances and select a loan that fits your budget and qualifies you for available programs.
| Feature | Conventional | FHA | VA | USDA |
|---|---|---|---|---|
| Min Credit Score | 620 | 580 (500 w/10% down) | No minimum | No minimum |
| Min Down Payment | 3% to 20% | 3.5% to 10% | 0% | 0% |
| Max DTI | 43% to 50% | 43% to 57% | 41%+ | 41% to 55% |
| Mortgage Insurance | PMI if <20% | Always | None | Always |
| Loan Limits | $806,500 | $524,225 to $571,500 | $806,500 | Varies |
| Property Eligibility Criteria | Few restrictions | Must meet FHA standards | Must meet VA standards | Rural/suburban areas only |
Step 5: Decide Where to Buy a Home in Texas
Deciding where to buy is one of the most important steps for a first time homebuyer in Texas. Consider factors like local housing markets, popular neighborhoods, cost of living, and amenities to help you find the best places to live in Texas.
Why Now Is the Time to Buy in Texas
The Texas housing market is a buyer’s market. You now have more negotiating power and a wider selection of properties to choose from:
- Housing Supply is High: Texas has a 5-month housing supply, which is the benchmark for a buyer’s market.
- Prices Have Stabilized: The median home price has remained relatively constant at $339,100. This allows you to set your budget with more certainty.
- Sellers are Negotiating: 33.3% of homes in Texas have seen price drops, signaling increased seller flexibility.
- Homes are on the Market Longer: Properties are taking an average of 70 days to sell, which allows you to make more informed decisions.
These trends show that now is the best time to buy a house in Texas. According to Mauricio Umansky, founder of The Agency, the current market provides “great opportunities for buyers to be aggressive and write strong offers.”
Popular Areas for Different Buyer Types
With the market now in your favor, you can be more selective about where you buy. Use this advantage to find a neighborhood that matches your priorities, whether it’s schools, commute, or lifestyle.
- Best Areas for Families: Neighborhoods like Frisco, Flower Mound, and The Woodlands are top choices for their excellent schools and family-friendly parks. For family-oriented communities, explore homes for sale in Cedar Park, TX. Properties with access to top-tier schools and parks typically range between $350,000 and $600,000.
- Best Areas for Retirees: For those seeking an active retirement, San Antonio, Granbury, and McAllen offer low-maintenance living and vibrant social activities. If you are interested in a community renowned for its active lifestyle, consider homes for sale in San Antonio, where prices generally range from $250,000 to $450,000.
- Best Areas for Young Adults: Cities like Austin, Dallas, and Houston offer thriving job markets and vibrant social scenes. If a cosmopolitan lifestyle is what you seek, browse the latest Dallas houses for sale, where you can find modern condos and apartments starting at just $200,000.
Consider the Cost of Living When Choosing a Location
When looking for the best place to buy a house in Texas, consider the overall cost of living, as lower home prices can be offset by higher taxes or insurance.
- High-Cost Areas: Cedar Park and Plano are 8–10% above the national average.
- Moderate-Cost Areas: Denton and Houston are near or just below the national average.
- Low-Cost Areas: Harlingen, Amarillo, and Brownsville are 16–18% below the national average.
Step 6: Start House Hunting in Texas
Once you’re pre-approved and know where you want to live, the next step is finding the right house. As a first-time home buyer in Texas, you have two options:
- Work with a Realtor.
- Search for homes online.
An experienced agent can give you valuable local insights and expert guidance on neighborhood trends. However, you’ll have to negotiate the buyer agent commission with the seller, which may raise the home sale price.
If you prefer to take the lead, a high-tech platform like Houzeo is what you need. Whether you’re looking for beachfront mansions, high‑rise penthouses, spacious big homes, or luxury homes in Texas, Houzeo has you covered. You can browse through thousands of listings, set alerts, and save your search. You can even schedule showings and submit offers, all by yourself.
Don’t Just Browse. Buy.
Your entire home purchase, managed in one place.
Download the Houzeo Mobile AppStep 7: Schedule and Attend Home Showings
After you narrow down your list of potential homes, schedule and attend showings to see each property in person. For a first-time home buyer in Texas, visiting homes firsthand helps you evaluate condition, layout, and neighborhood, ensuring you make an informed choice.
During the showing, ask specific questions like:
- How long has the home been on the market?
- Why is the owner selling?
- What is the age of the roof, HVAC system, and water heater?
- Are there any HOA fees or pending special assessments?
- Is the property located in a flood zone?
When buying a house in Texas for the first-time, check the property carefully during the open house. Look for roof sagging, foundation cracks, water stains, uneven floors, or sticking doors, which may indicate serious issues.
As a first time home buyer in Texas, there are three main aspects you need to focus on when shortlisting homes:
- Insurance Risks: Verify the home’s flood zone using FEMA’s maps. Get a 4-point inspection report to assess insurability and identify features, like an old roof or the lack of impact windows, that could drive up insurance costs.
- Commute and Lifestyle: Test your commute during rush hour. Visit the neighborhood at different times to check for noise from traffic, airports, or nightlife. Ensure convenient access to key amenities like schools, groceries, and parks.
- Texas Home Loans/Assistance Program Eligibility: If you’re applying for a loan or first time buyer program in Texas, ensure that the house complies with its property requirements, or you may risk losing the assistance.
Step 8: Make an Offer
When crafting an offer, make a competitive bid but stay within your budget. As a first-time home buyer in Texas, consider factors like the home’s market value, recent comparable sales, and any repairs needed. This increases your chances of getting a fair deal.
Step 1: Analyze Recent Sales
Your agent will pull up real estate comps that are similar to the one you want. Focus on the final sale price, not the list price. Home prices in many Texas metro areas have seen modest declines, so your offer should reflect this trend.
Step 2: Adjust for the Home’s Condition
Factor in the age and condition of the roof and HVAC. If a comparable home sold for $339,100 but had a new roof, and your target home needs a $20,000 replacement, adjust your offer to account for that expense.
Step 3: Factor in Today’s Market
With more homes for sale, you have leverage. Even home builders are lowering their prices by almost 6% to attract buyers. So, for a home that is priced fairly, offer 3% to 5% less. If it is overpriced, you can justify an even lower offer, citing both the comps and market trends.
What is an Earnest Money Deposit in Texas?
An earnest money deposit is a “good-faith” payment that shows you are a serious buyer. This money is held in escrow and applied towards your down payment at closing.
In Texas, the standard deposit is 1% to 3% of the purchase price. On a $339,100 home, this would be between $3,391 and $10,173. In highly competitive markets like Houston or Austin, sellers may expect a deposit closer to 10%.
Once your offer is accepted, you typically have 3 business days to submit the deposit to an escrow agent, such as a title company or real estate attorney.
Yes, you can get your earnest money deposit back in Texas, but only if you back out of the sale for the following reasons:
- The inspection reveals major issues, and you exercise the inspection contingency.
- The appraisal comes in low, and you exercise the appraisal contingency.
- You’re unable to secure the required financing, and exit during the financing contingency period
- Title issues are discovered.
Many Texas first time home buyers forfeit their earnest money because:
- They back out after the contingency periods expire without a valid reason.
- They violate contract terms.
- The seller meets all contract obligations, but the buyer still refuses to close.
Step 9: Conduct Home Inspections
First-time home buyers in Texas should schedule home inspections to uncover any issues before buying a house. You typically get the inspection report within 24 to 48 hours.
Which Texas Home Inspections Should You Schedule?
A standard home inspection in Texas isn’t enough. The state’s unique climate and weather risks require a few specialized inspections:
- General Home Inspection ($340–$461): A licensed inspector will examine everything from the roof to the foundation. They pay special attention to storm damage, proper drainage, and the age of the AC unit.
- 4-Point Inspection ($85–$125): Insurance companies require a 4-point inspection for homes over 30 years old. It focuses on the four most critical systems: the roof, HVAC, electrical, and plumbing. An old roof or an outdated electrical panel can result in the insurance coverage being denied.
- Foundation Inspection ($300–$1,000): Homes in the Central and North Texas are prone to foundation movement due to its expansive clay soil. A foundation inspection can help you identify settlement, cracks, and drainage problems that may lead to costly repairs later.
- Roof Inspection ($150–$350): Given Texas’ vulnerability to hailstorms, high wind, and intense heat, a detailed roof inspection is crucial. A roof inspection helps identify damaged shingles, leaks, or inadequate ventilation and other issues that can affect insurance coverage.
- WDO / Termite Inspection ($75–$375): A termite inspection is mandatory for government-backed loans like FHA and VA, and is highly recommended for all others. Texas’ warm, damp climate is a breeding ground for termites and other pests that can cause severe structural damage.
Consider Other Specialized Inspections
Based on the property, a Texas first-time home buyer may want to conduct additional tests. For older homes, a sewer scope can detect cracks or tree roots in the main sewer line, saving you from a $15,000 repair down the road. If you see large cracks or uneven floors, a $1,000 foundation inspection is worth the investment.
For rural properties, a septic inspection is essential. If the home has a pool, a separate pool inspection will check the pump, filter, and structure for costly defects.
It’s not recommended. Even if you plan to buy cheap homes in Texas, skipping a home inspection can lead to unexpected repair costs.
Step 10: Complete the Home Appraisal
After the inspection, your lender will typically order a home appraisal, which professionally values the property to ensure it matches your offer.
Why Do Lenders Need Appraisals?
A home appraisal in Texas confirms the property’s market value. Appraisers typically focus on the following parameters:
- Flood Zone and Elevation: A home in a high-risk flood zone AE or VE (common in parts of Houston and the Gulf Coast) will likely be valued lower than a similar inland property on higher ground due to higher insurance premiums and potential risk.
- Soil and Foundation Condition: Central and North Texas are known for expensive clay soil, which can cause foundation movement and cracking. By evaluating this, appraisers in Texas assess a property’s structural integrity and long-term value.
- Roof and Storm Resilience: The age of the roof, hail or wind-resistant features, and impact-resistant windows directly affect a home’s insurability and, therefore, its market value.
- Condo/HOA Health: For condos or HOA-governed properties, appraisers closely examine the association’s financial stability. They look for anything that may reduce the unit’s value, like the association’s reserve funds or any pending special assessments.
A standard appraisal in Texas costs between $675–$800 and typically takes 7 to 14 days to complete. For luxury or waterfront properties, the cost and timeline can be higher.
If the appraisal comes in lower than your offer price, you have an appraisal gap. In such a situation, you can either:
- Renegotiate the Price: Ask the seller to lower the price to the appraised value. In the current market, many sellers are willing to negotiate.
- Cover the Gap: If the seller won’t budge, you can choose to pay the difference in cash.
- Dispute the Appraisal: If you believe the appraiser made a factual error or used poor comparable sales, you can file for a Reconsideration of Value.
- Walk Away: If you cannot reach an agreement, your appraisal contingency allows you to cancel the contract and get your earnest money back.
Step 11: Negotiate Repairs and Credits
As a first time home buyer in Texas, use your home inspection results to negotiate repairs and request credits from the seller. This step can help reduce unexpected costs and ensure your new house is move-in ready.
How to Use Your Inspection Report to Negotiate Repairs?
Your negotiation strategy should center on issues that impact the home’s safety, structural integrity, and insurability. Minor cosmetic flaws are not worth fighting over and can make you seem unreasonable. It’s easy to make this mistake as a first home buyer in Texas.
Focus your request on these critical areas:
- Safety Hazards: This includes outdated and dangerous electrical panels, faulty wiring, or missing safety features like GFCI outlets near water.
- Structural Problems: Any issues with the foundation, load-bearing walls, or the roof structure.
- System Failures: A failing HVAC system, major plumbing leaks, or an old roof.
Get 2 to 3 written estimates from licensed contractors for any major repairs. A repair request that includes professional quotes shows you are serious and have done your homework.
Should You Ask for Repair Credit?
While you can ask the seller to perform the repairs themselves, it’s better to ask for credit instead. Credit gives you the funds to hire your own contractors and ensures the work is done to your standards, not just the cheapest way possible. It also allows the sale to proceed on schedule, without any delays.
How to Negotiate Seller Concessions
Seller concessions are a powerful tool for reducing your out-of-pocket closing costs when buying real estate in Texas. Here, the seller pays for some of your expenses, such as the appraisal, title insurance, or property taxes.
Your ability to negotiate concessions depends on your loan type. Each loan program sets a maximum limit on how much a seller can contribute:
| Loan Type | Minimum Down Payment | Maximum Seller Concession |
|---|---|---|
| Conventional | Less than 10% | 3% of the purchase price |
| Conventional | 10% to 24.99% | 6% of the purchase price |
| Conventional | 25% or more | 9% of the purchase price |
| FHA Loan | Any amount | 6% of the purchase price |
| VA Loan | Any amount | 4% of the purchase price |
| USDA Loan | Any amount | 6% of the purchase price |
Step 12: Review Your Closing Costs
After negotiating repairs and credit as a first time home buyer in Texas, review all closing costs carefully. Check title fees, escrow, insurance, and taxes so you can finalize your budget and confidently buy your house.
Understanding Closing Costs in Texas
- Title Fees ($1,700+): This includes title search, settlement services, and title insurance. In some counties, the seller customarily pays for the owner’s title insurance as part of their obligation to provide the buyer with a clear title.
- Third-Party Fees ($1,000 to $2,000): This category includes the appraisal fee, credit report fee, and inspection fee. It also covers any inspections you ordered, like the general, 4-point, and termite inspections.
- Prepaid and Escrow Costs ($3,000 to $6,000): You will pay for your first year of homeowners’ and flood insurance upfront. You will also fund your escrow account with several months of property tax and insurance payments to cover future bills.
- Additional Costs: You should also budget for any additional lender charges, such as loan origination fees. On average, buyers in taxes pay 2% to 5% in closing costs, making it essential to plan carefully for any expenses.
Step 13: Close on Your New Home
Closing day is the moment you officially become the owner of your new Texas home. Its success depends on a careful final walk-through, a smooth funding process, and making sure all legal documents are properly signed and recorded.
Complete Your Final Walk-Through
Within 24 hours of closing, you will do one last walk-through of the property. This is not a formal inspection, but rather your final chance to see if you want this home. Use this checklist:
- Verify Repairs: Bring your inspection report and repair addendum. Confirm that all negotiated repairs have been completed to a professional standard.
- Test Everything: Run the air conditioning and test all appliances. Make sure every system is functioning as it should.
- Check for Included Items: Ensure all items that were supposed to be included in the sale, like appliances, window treatments, and light fixtures, are still in place.
- Look for Signs of Additional Damage: Make sure no new damage has occurred since your last visit. If you see any issues, notify your agent and the title company immediately before you sign any documents.
Sign the Documents
While there are numerous documents to sign, the most important ones are:
- The Closing Disclosure: You will sign the final version of this document, which outlines all your loan terms and costs.
- The Promissory Note: This is your legal promise to repay the loan. The promissory note outlines the loan amount, interest rate, repayment schedule, and maturity date.
- The Mortgage: This document secures the property as collateral for your loan.
Once you have signed everything, you will provide your “cash to close” amount via a cashier’s check or wire transfer. After your lender sends their funds to the title company, the deal is officially funded.
Get Your Keys and Celebrate
Once the deal is funded, the title company will record the new deed with the county, officially transferring ownership to you. After they pay the seller and other parties, you will finally get the keys to your new home.
Congratulations, you are officially a Texas homeowner! 🎉
🚩 What are the Red Flags to Look for When Buying a House in Texas?
A new home is a huge financial investment. To ensure that you don’t sink your money into a dud, look out for these red flags:
1. Bargain-Priced Homes
An asking price that’s significantly lower than comparable homes in the area seems like a dream come true. But that’s just until the roof collapses or faulty electrical systems burn the house down.
An extremely low price could mean the property is uninsurable, or is located in a high-risk flood zone with steep insurance costs. So before you put in an offer, check the home’s sale history and other permits from the local county’s office. Also, get insurance quotes to understand your total expense better.
2. Neighborhood Sell-Out
During the open house, if you notice too many “For Sale” signs on a single street or in a small community, it should ring alarm bells. It could be due to skyrocketing HOA fees, declining school quality, or a recent increase in crime rates. It could also point to a future nuisance, like a commercial development planned nearby.
Talk to potential neighbors to get their opinion on the area. You can also check community social media pages or online forums like Nextdoor for discussions about local issues.
3. Excessive Use of Air Fresheners
A few scented candles create a welcoming atmosphere, but if a home smells like a lavender bubble burst in it, then there’s something fishy. It may be covering up a musty smell that highlights the presence of mold and plumbing issues.
Pay close attention to the smell in the closets, bathrooms, and around the air conditioning unit. Open kitchen and bathroom cabinets and smell the area under the sink. If you detect a musty odor, ask for a separate mold inspection along with the standard home inspection.
4. Sloping or Uneven Floors
Floors that are noticeably slanted or feel bouncy can indicate foundation problems. Given Texas’ expensive clay soil, soil settlement can cause the foundation to shift over time. Minor settling may be acceptable in older homes, but significant slopes signal a major structural issue.
Bring a marble or a golf ball with you to showings and place it on the floor in different rooms to see if it rolls. Also, look for other signs of foundation issues, like large zigzag cracks in the drywall, especially above door frames.
5. Condensation in Windows
Fog trapped between the panes of double-glazed windows is a sign that the seal has failed. When the seal breaks, the insulating argon gas leaks out and is replaced by moisture-filled air. This compromises the window’s energy efficiency and leads to higher cooling costs in Texas’ hot climate.
Inspect each window and pay special attention to those that receive direct sunlight, as heat can cause seals to fail faster. If you see failed seals, get a quote for window replacement to use as a negotiating point.
What Should You Do After Closing?
Welcome home! Now it’s time to handle a few must-dos to protect your investment:
- File for Homestead Exemption: If the house is your primary residence, apply for Texas’ Homestead Exemption to reduce your property taxes. You could save about $100,000 in taxes, which is especially valuable in high-tax areas like Austin and Plano.
- Set Up Utilities: Get the water, electric, internet, and trash services connected. Don’t forget pest control for termites and fire ants infestation, common in areas like Austin and Houston, where bugs are active year-round.
- Get Insurance: Homeowners insurance is required if you’re financing, and flood insurance may be needed in FEMA zones. Rates are higher in coastal areas like Galveston and Houston due to hurricane risk.
- Home Maintenance Plan: Schedule AC tune-ups at least twice a year, clear gutters regularly, and inspect roofs for storm damage or algae buildup. Consider wind mitigation upgrades to reduce insurance costs.
How to Buy a House in Texas Without a Realtor?
Research neighborhoods and browse listings on trusted sites like Houzeo. Then, schedule showings directly with sellers or their agents. You can also hire a real estate attorney to review contracts and handle legal details.
Next, get pre-approved for a mortgage, make an offer, schedule inspections, and negotiate repairs. With the necessary due diligence, you can buy a house without a Realtor.
Which First Time Home Buyer Programs in Texas Can You Apply For?
Various programs make homeownership accessible for a first time home buyer in Texas. They assist with down payments through grants or low-interest, deferred-payment loans. Applicants must meet the income and credit score criteria and complete a homebuyer education course to avail of these programs.
| Program Name | Eligibility | Grants/Assistance | Key Benefit |
|---|---|---|---|
| My First Texas Home Program | First-time buyers, veterans, and income limits apply | Up to 5% down payment and closing cost assistance | 30-year fixed low-interest first mortgage |
| My Choice Texas Home Program | All eligible buyers, no first-time buyer requirement | Up to 5% as a forgivable 2nd lien for down payments and closing costs | 30-year low-interest mortgage |
| Home Sweet Texas Home Loan Program | Low to moderate-income buyers | Up to 5% down payment and closing cost assistance | Available statewide, with no first-time buyer restriction |
| 5 Star Texas Advantage Program | No first-time buyer requirement, income, and credit criteria | 0% interest, 3-year forgivable second mortgage for down payments or closing costs | No repayment required grant |
| Homes for Texas Heroes | Teachers, firefighters, EMS, police, and veterans | 3% to 5% down payment assistance, some grants | Low-interest mortgage + assistance for community heroes |
| City of Dallas Homebuyer Assistance | Low- to moderate-income homebuyers in the Dallas city limits | Varies, up to $20,000 | Financial assistance for down payment and closing costs |
| City of Houston Homebuyer Assistance | First-time buyers within Houston city limits | Up to $50,000 no-interest loan | Substantial assistance with down payment and closing |
1. My First Texas Home Program
- Eligible Buyers: First-time homebuyers with an income below their county’s limit.
- Credit Score: Minimum 640.
- Assistance: A 30-year, fixed-rate first mortgage and up to 5% in down payment assistance.
The My First Texas Home Program is a state-sponsored mortgage program for first-time homebuyers and veterans. It offers first-time buyers an affordable 30-year fixed-rate mortgage. To qualify, you must meet county-specific income and purchase price limits and complete a homebuyer education course.
2. My Choice Texas Home Program
- Eligible Buyers: Available to all eligible buyers, including repeat homebuyers and veterans.
- Credit Score: Minimum 620.
- Assistance: A 30-year, low-interest mortgage and up to 5% in down payment assistance.
The My Choice Texas Home Program offers eligible Texas residents 30-year low-interest mortgages. Additionally, buyers can receive a forgivable 2nd lien for down payments and closing costs. Finally, some products can also qualify for as low as 3% down payment.
3. Home Sweet Texas Home Loan Program
- Eligible Buyers: Low to moderate-income home buyers.
- Credit Score: 620+.
- Assistance: A 30-year, fixed-rate first mortgage and up to 5% in down payment assistance.
The Home Sweet Texas Home Loan Program offers a 30-year fixed mortgage and up to 5% down payment assistance, either as a grant or a zero-interest second mortgage. The home must be a primary residence, and buyers must meet county-specific income and purchase price limits.
4. 5 Star Texas Advantage Program
- Eligible Buyers: Buyers purchasing a primary residence.
- Credit Score: 640+
- Assistance: Mortgage packages including first, second, and third mortgages as needed.
The 5 Star Texas Advantage Program is a down payment assistance program that offers a 0% interest, 3-year forgivable second mortgage for down payments and closing costs. Keep in mind, the program is not available in El Paso, Grand Prairie, McKinney, or Travis County.
5. Homes for Texas Heroes
- Eligible Buyers: Teachers, school staff, first responders, correctional officers, and veterans.
- Credit Score: 620+
- Assistance: 3% to 5% down payment assistance as grants or a deferred forgivable second lien loan.
The Homes for Texas Heroes program offers 3% to 5% down payment assistance as grants or as a 30-year fixed mortgage. To qualify, the buyer must be a teacher, school librarian, school counselor, school nurse, peace officer, firefighter, EMS personnel, correctional officer, or a veteran of the U.S. Armed Forces or Texas National Guard.
6. City of Dallas Homebuyer Assistance (DHAP)
- Eligible Buyers: First-time buyers with income equal to or below 80% of the AMI.
- Credit Score: Flexible credit requirements.
- Assistance: Up to $50K for down payment and closing costs ($60K in high opportunity areas).
The Dallas Homebuyer Assistance (DHAP) program offers financial assistance for down payments and closing costs to eligible first-time homebuyers in Dallas. To qualify, the buyers must have income equal to or below 80% of the Area Median Income (AMI).
7. City of Houston Homebuyer Assistance (HAP)
- Eligible Buyers: First-time buyers with income equal to or below 80% of the AMI.
- Credit Score: Flexible credit requirements.
- Assistance: Up to $50,000 in a no-interest, forgivable loan for down payments and closing costs.
The City of Houston Homebuyer Assistance Program (HAP) offers up to $50,000 in a no-interest, forgivable loan for down payment and closing costs. To qualify for the programs, the buyers must be first-time home buyers earning equal to or less than 80% of their area’s AMI.
» First Time Buyer Programs: Find the perfect program that helps you get the key to your first home.
How to Buy a House in Texas Near Me
What Should You Know Before Buying a House in Texas?
Before you buy a home in the Lone Star State, you must understand the factors that can impact your budget and lifestyle.
What are Some Additional Costs When Buying Houses in Texas?
Apart from the purchase price, you must account for several other expenses, like property taxes and potential HOA fees. However, the most critical consideration for any Texas homebuyer is insurance.
- Why Homeowners Insurance is Crucial: Texas’ vulnerability to hail storms, hurricanes, floods, and other natural disasters makes homeowners’ insurance important. This coverage protects your investment from catastrophic damage.
- High Insurance Costs: Due to these risks, the projected annual cost of homeowners’ insurance may go as high as $6,000. That’s almost twice the national average!
- Choosing the Right Policy: When selecting a policy, ensure it provides adequate hurricane and flood coverage. You could lower your premium by choosing a home elevated above flood levels.
Do You Need Separate Flood Insurance in Texas?
Yes, you do. Standard homeowners’ insurance does not cover flood damage, so a separate policy is necessary for protection. FEMA maps determine your property’s flood risk:
| Flood Zone | Risk Level | Insurance Recommendation |
|---|---|---|
| V, VE, V1–V30, AE | High Risk | Flood insurance is mandatory for federally-backed mortgages in these coastal and high-risk Texas zones. |
| B, C, X, X500 | Moderate-Low | Flood insurance is highly recommended. Around 40% of flood claims come from these lower-risk Texas areas. |
| Outside Flood Zones | Varies | Flooding can occur anywhere. Texas flood experience shows that even non-zone homes benefit from coverage. |
When is Flood Insurance Required?
Whether you need flood insurance typically depends on your property’s location, your mortgage lender, and your homeowners’ insurance provider. However, there are two main situations where flood insurance is mandatory in Texas:
- Federally-Backed Mortgages in High-Risk Zones: If your home is in a high-risk flood zone and you have a federally-backed mortgage, federal law requires you to have flood insurance.
- Windstorm Insurance Association Policies (TWIA): Texas law requires flood insurance if you get insurance through The Windstorm Insurance Association and your home is in a high-risk coastal flood zone. This applies to homes built or modified after September 1, 2009.
Why First-Time Homebuyers Should Explore Texas Now?
Texas is a smart choice for first-time buyers, thanks to its no-income-tax policy and a market that now favors buyers. From Dallas’ job market to Corpus Christi’s coastal charm, there’s a community for every budget. With thousands of homes for sale and numerous down payment assistance programs, homeownership is more attainable than ever.
» Houzeo Reviews: Read what customers have to say about Houzeo, Texas’ best home buying website.
