In this article:

Bluebonnets, city lights, and cattle drives – these are just a few of the things that make Texas tick. The Lone Star State has long been a place where people go to put down roots.

As the second-largest state in the country, Texas offers both big-city amenities and small-town charms. The booming Texas real estate state market also draws all types from all corners of the country, looking to maximize their home buying potential while taking full advantage of the state’s favorable tax conditions, including no state income tax!

Buying a home in Texas can be an exciting milestone, especially for those who are new to homeownership. However, before you start browsing listings or visiting open houses, there are some tips that first-time home buyers in Texas should keep in mind.

Get pre-approved by a lender

First things first, you’ll need to get some insight into your finances. A great way to do so is by getting a pre-approval letter from a lender. Getting pre-approved is the recommended first step in a first-time home buyer’s journey because it helps borrowers see where they stand financially and gives them an idea of today’s home loan market.

A pre-approval or pre-qualification letter from a lender will show you how much money a lender is willing to give you for your home purchase. This information, along with the amount of cash you have on hand, will give you an accurate estimate of your price range.

The first step to getting a mortgage pre-approval is finding the right lender. Not sure where to start when looking for a mortgage lender? Most homebuyers rely on immediate and extended family or friends and co-workers for referrals on a trustworthy mortgage lender. While this can be a good starting point, it’s good to shop around until you find a lender that offers the best loan options for your personal and financial goals.

A mortgage lender will help you go over your finances to determine what type of Texas home you can afford and what loans you may qualify for. They will also explain the different loan types and inform you where the current interest rates are, helping you plan a reasonable monthly payment plan that fits your means and budget.

To issue a pre-approval, the lender will need to look at several aspects of your financial scenario. The information the lender will need includes proof of your income, proof of assets, credit score, employment verification, plus any additional documentation to give them a clear picture of your finances. From there, the lender will assess your situation and draft a letter stating what you can afford. It’s a good idea to gather these documents ahead of time. The better prepared you are as a borrower, the easier the pre-approval process is.

Narrow down your home search

Once you have the pre-approval letter, you’ll be ready to work with a local real estate agent to find your first Texas home. Outlining your wants and needs with a real estate agent is an essential first step in finding a home where your family will thrive.

There are a few things you’ll need to decide on in order to narrow down your Texas home search. These factors include understanding your overall budget, current lifestyle, desired school districts, commute times, local attractions, and community amenities.

As you start visiting homes, make sure you take detailed notes of what you like and dislike and share your thoughts with your agent. A good agent will use this feedback to help guide your house hunt, so you won’t spend time viewing homes that don’t fit the bill.

Our team of Texas agents has put together some Texas neighborhood guides to help buyers find the perfect place to put down roots. Click on your city to take a look: San AntonioDallasAustin

Research first-time homebuyer programs

When you are ready to purchase a home, it’s essential to learn about the various mortgage options available to you. Many first-time buyers don’t anticipate how the down payment and closing costs can add up quickly. Luckily, several home loan programs in Texas make homeownership more affordable for first-timers like you.

The Texas Department of Housing and Community Affairs is a great place to start when researching housing options in Texas. Here you can find resources about programs for first-time homebuyers, federal tax information, and more.

Texas Mortgage Credit Certificate Program

One popular Texas home buying program is the Texas Mortgage Credit Certificate Program. The Texas Mortgage Credit Certificate Program, also known as (MCC), is a tax credit that reduces the federal income taxes of qualified buyers purchasing a qualified residence. The size of the annual tax credit through the MCC program can range from 20% to 25% of the yearly interest paid on the mortgage loan.

To be eligible for the Texas Mortgage Credit Certificate Program, you must be a first-time home buyer, veteran, or a home buyer who has not owned a home within the past three years. The program is available statewide through an extensive network of participating lenders. Plus, there’s no minimum FICO credit score for the stand-alone MCC option.

My First Texas Mortgage Loan

My First Texas Mortgage Loans provides mortgage options with down payment assistance and closing cost assistance for eligible homebuyers. This loan program includes options for first time home buyers and previous homeowners. There are programs for down payment assistance and closing cost assistance up to 5% of the loan amount, and a variety of government loan options such as FHA loans and VA and USDA structured loans. You may also be able to combine a My First Texas Mortgage with a Texas Mortgage Credit Certificate to get both programs’ benefits.

Home For Texas Heroes Program

The Homes For Texas Heroes program provides home buying assistance and options specifically tailored for homebuyers in community-centric professions. The following jobs are eligible: public school teachers, corrections officers, EMS personnel, firefighters, police officers, school librarians, school counselors, school nurses, veterans, and active military.

Financial eligibility for the program closely resembles many other Texas homebuying programs except that you do not have to be a first-time homebuyer. Benefits of this loan program include several competitive 30-year fixed-rate interest loans and down payment assistance issued as a grant (meaning it never needs to be repaid), which is available for up to 5% of the loan amount.

The Home For Texas Heroes program is available statewide with a network of participating lenders. However, income limits will vary by county, and expanded income limits and purchase price limits in targeted areas may apply.

Questions about buying your first home in Texas?

Our team of local real estate agents is here to help! We make it easy to find, tour, and buy your first home. Learn more here.

Your dream home is waiting for you

Tell us your must-haves to see personalized home recommendations that meet your criteria.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

The stress-free way to buy and sell

With Orchard, secure your dream home before you list. Avoid home showings, rentals, and double moves.

Learn More