Your Journey to Homeownership Starts Here
Buying your first home ranks among life's most significant financial decisions—and one of the most exciting. The process can feel overwhelming, especially in today's market with 6-6.5% mortgage rates, rapidly appreciating home prices, and competition from experienced buyers.
But here's the truth that many first-time buyers don't realize: 2026 presents real opportunities for those who approach the process strategically.
Builder incentives are at 5-year highs. Down payment assistance programs in Texas offer up to 5% of your purchase price. And contrary to popular belief, you don't need 20% down or perfect credit to buy a home—many first-time buyers purchase with as little as 3-3.5% down.
This guide walks you through every step of the first-time homebuying journey in North Texas, from determining if you're financially ready through closing day and your first year of homeownership. We'll cover exactly how much money you actually need, which loan programs work best for different situations, how to navigate the North Texas real estate market, and strategies for making competitive offers in communities like Harvest, Pecan Square, Treeline, and Landmark.
Whether you're looking at new construction in master-planned communities or resale homes in established neighborhoods, this guide provides the knowledge you need to make informed decisions and avoid costly mistakes.
Let's turn your dream of homeownership into reality.
Part 1: Are You Ready to Buy?
The Real Financial Requirements
The biggest myth preventing first-time buyers from entering the market is the belief that homeownership is financially out of reach. Let's start by addressing what you actually need.
Down Payment:
Contrary to popular belief, you don't need 20% down. Many first-time buyers purchase homes with much less:
- Conventional loans: As low as 3% down for first-time buyers (programs like Conventional 97, HomeReady, HomeOne, Home Possible)
- FHA loans: 3.5% down with credit scores as low as 580
- VA loans: $0 down for eligible veterans and active military
- USDA loans: $0 down for eligible rural properties
What this means in real numbers:
On a $350,000 home (approximately the median price in North Texas for first-time buyer-friendly properties):
- 3% down = $10,500
- 3.5% down (FHA) = $12,250
- 5% down = $17,500
- 20% down = $70,000
Most first-time buyers in North Texas close with $10,000-$20,000 total cash, not $70,000.
Closing Costs:
Beyond your down payment, you'll need funds for closing costs, which typically range from 2-5% of the purchase price:
- Lender fees: Origination, underwriting, processing ($1,500-$3,000)
- Title and escrow: Title insurance, escrow fees, recording ($2,000-$4,000)
- Prepaid items: Property taxes, homeowners insurance, HOA dues ($2,000-$5,000)
- Inspection and appraisal: Home inspection, appraisal ($600-$1,200)
On a $350,000 purchase, expect $7,000-$17,500 in closing costs.
However, many of these costs can be negotiated. Sellers often contribute $5,000-$15,000 toward buyer closing costs, especially in balanced or buyer-favorable markets. Additionally, builders in new construction communities frequently offer closing cost incentives ($5,000-$15,000) and interest rate buydowns (temporary 2-1 or 3-2-1 buydowns, or permanent rate reductions) to make their homes more attractive. Some lenders also offer "lender credits" where they cover closing costs in exchange for a slightly higher interest rate.
The Bottom Line:
A realistic first-time buyer in North Texas can purchase a $350,000 home with approximately $15,000-$25,000 total cash for down payment and closing costs—and potentially less with seller concessions and down payment assistance programs.
Credit Score Requirements
Your credit score significantly impacts your loan options, interest rates, and monthly payments.
Minimum Credit Scores by Loan Type:
- Conventional loans: 620 minimum (some programs), though 640-660 is more common for best terms
- FHA loans: 580 minimum for 3.5% down; 500-579 requires 10% down
- VA loans: No official minimum, but most lenders require 580-620
- USDA loans: 640 minimum for automated underwriting
What Your Credit Score Means:
- 740+: Excellent rates, best loan terms, lowest PMI costs
- 680-739: Good rates, standard loan terms, moderate PMI
- 620-679: Higher rates, stricter requirements, higher PMI
- 580-619: FHA likely your best option, limited conventional access
- Below 580: Very limited options, may need to wait and improve credit
Credit Score Impact Example:
On a $350,000 loan with 5% down ($332,500 borrowed):
- 760 credit score: 6.25% rate = $2,047/month (P&I)
- 680 credit score: 6.75% rate = $2,156/month (P&I)
- 620 credit score: 7.25% rate = $2,268/month (P&I)
The difference between excellent and marginal credit can cost you $200+/month or $72,000+ over 30 years.
Improving Your Credit:
If your score needs work, focus on:
- Pay all bills on time: Payment history accounts for 35% of your score
- Pay down credit card balances: Keep utilization below 30%, ideally below 10%
- Don't close old credit cards: Credit history length matters
- Dispute errors: Check your credit report at AnnualCreditReport.com and dispute inaccuracies
- Avoid new credit applications: Each hard inquiry can temporarily lower your score
Improving your credit score by 40-60 points can save you tens of thousands of dollars over the life of your mortgage.
Debt-to-Income Ratio (DTI)
Lenders evaluate your ability to afford monthly payments using your debt-to-income ratio—your total monthly debt payments divided by your gross monthly income.
DTI Calculation:
Monthly debts include:
- Future mortgage payment (principal, interest, taxes, insurance, HOA)
- Credit card minimum payments
- Auto loans
- Student loans
- Personal loans
- Any other recurring monthly debt obligations
Gross monthly income:
- Salary before taxes and deductions
- Bonuses (if consistent and verifiable)
- Rental income (with documentation)
- Self-employment income (averaged over 2 years)
DTI Requirements by Loan Type:
- Conventional loans: Typically 43% maximum, up to 50% with strong compensating factors
- FHA loans: Up to 50-57% with automated underwriting approval
- VA loans: No hard maximum, but lenders typically cap at 41-45%
- USDA loans: 41% maximum
DTI Example:
Monthly gross income: $7,000 Maximum 43% DTI: $3,010 in total monthly debts
If you have:
- $400 car payment
- $300 student loan payment
- $100 credit card minimum
- $800 total existing debt
You can afford up to $2,210/month in housing payment ($3,010 - $800 = $2,210)
That $2,210/month housing payment might break down as:
- $1,750 principal & interest
- $300 property taxes
- $100 insurance
- $60 HOA dues
Improving Your DTI:
- Pay off smaller debts to eliminate monthly obligations
- Increase your income through raises, bonuses, or side income
- Avoid taking on new debt before buying
- Consider a less expensive home to lower your housing payment
Employment and Income Stability
Lenders require proof of stable, verifiable income.
Standard Employment Requirements:
- Two years of employment history in the same field or related fields
- Consistent income without large unexplained gaps
- Current employment verified by your employer during closing
- Documentation: W-2s for past 2 years, recent pay stubs, verification of employment
Special Situations:
Recent job change: If you changed jobs within the past 2 years but stayed in the same industry/field, you typically won't have issues. Changing careers shortly before applying may require additional documentation or waiting.
Gaps in employment: Gaps due to school, medical leave, or family care can usually be explained and documented. Unexplained gaps raise concerns.
Self-employed buyers: Need 2 years of tax returns showing stable or increasing income. Lenders average your income over 2 years. Self-employed buyers should work with experienced loan officers who understand non-W-2 income documentation.
Commission or bonus income: Lenders can include commission or bonus income if you can document a 2-year history. They'll typically average this income over 2 years.
Multiple jobs: If you work multiple jobs, you can include income from all positions as long as you've maintained them consistently.
The Total Cash You Actually Need
Let's put all these costs together with realistic examples for North Texas first-time buyers.
Example 1: Conventional Loan with Seller Concessions
Purchase price: $325,000 Loan type: Conventional 97 (3% down) Credit score: 700 Down payment: $9,750 (3%) Closing costs: $9,750 (3% of purchase price) Seller contribution: $6,500 (2% of purchase price) Total cash needed: $13,000
Example 2: FHA Loan
Purchase price: $350,000 Loan type: FHA (3.5% down) Credit score: 620 Down payment: $12,250 (3.5%) Closing costs: $10,500 (3% of purchase price) Seller contribution: $7,000 (2% of purchase price) Total cash needed: $15,750
Example 3: VA Loan (Eligible Veterans)
Purchase price: $375,000 Loan type: VA (0% down) Credit score: 680 Down payment: $0 Closing costs: $11,250 (3% of purchase price) VA funding fee: Can be rolled into loan Seller contribution: $7,500 (2% of purchase price) Total cash needed: $3,750
Example 4: TSAHC Program with Down Payment Assistance
Purchase price: $300,000 Loan type: Conventional with TSAHC assistance Credit score: 660 Down payment: $9,000 (3%) Down payment assistance: $9,000 (3% grant from TSAHC) Closing costs: $9,000 (3% of purchase price) Seller contribution: $6,000 (2% of purchase price) Total cash needed: $3,000
The examples above demonstrate that first-time buyers in North Texas can realistically purchase homes with $3,000-$16,000 in total cash, not the $50,000-$70,000 many assume they need.
Part 2: The North Texas Real Estate Market
Understanding North Texas Geography
The Dallas-Fort Worth metroplex is massive, and each area offers distinct characteristics, price points, and lifestyles.
Denton County (Denton, Argyle, Northlake, Justin):
- Character: Growing suburban communities with master-planned developments, new construction, excellent schools
- Price range: $300,000-$600,000 for most first-time buyer properties
- Commute: 30-50 minutes to DFW Airport, major employment centers
- Highlights: Harvest, Pecan Square, Treeline, Landmark by Hillwood
- School districts: Argyle ISD, Northwest ISD, Denton ISD (all highly rated)
Collin County (McKinney, Frisco, Prosper, Plano):
- Character: Established growth, mature infrastructure, corporate presence
- Price range: $350,000-$700,000+ for first-time buyer properties
- Commute: 20-40 minutes to North Dallas employment centers
- Highlights: Legacy West, The Star, extensive shopping and dining
- School districts: Frisco ISD, Prosper ISD, Plano ISD (top-rated)
Tarrant County (Fort Worth suburbs, Alliance corridor):
- Character: Mix of urban renewal and suburban growth, industrial/commercial strength
- Price range: $275,000-$500,000 for first-time buyer properties
- Commute: Varies widely by location
- Highlights: Alliance Town Center, Near Southside (urban living)
- School districts: Fort Worth ISD, Keller ISD, Eagle Mountain-Saginaw ISD
Dallas County (North Dallas suburbs):
- Character: Closer-in locations, higher density, mature neighborhoods
- Price range: $300,000-$600,000+ (highly variable by area)
- Commute: 15-30 minutes to central Dallas
- Highlights: Proximity to urban amenities, established communities
- School districts: Richardson ISD, Carrollton-Farmers Branch ISD, Garland ISD
New Construction vs. Resale Homes
First-time buyers face a fundamental choice: new construction or existing homes.
New Construction Advantages:
- Everything is new (no deferred maintenance)
- Modern floor plans and features
- Energy efficiency (lower utility costs)
- Builder warranties (1-2-10 year coverage)
- Customization opportunities
- Master-planned community amenities
- Predictable costs
New Construction Disadvantages:
- Higher price points ($50,000-$100,000+ premium over comparable resale)
- MUD taxes in developing areas ($200-$400/month additional)
- Construction delays possible
- Limited negotiation flexibility
- Immature landscapes and neighborhoods
- Fewer large trees and established character
Resale Home Advantages:
- Lower purchase prices
- Established neighborhoods
- Mature landscaping and trees
- More negotiation flexibility
- Potential for "good bones" with updates needed
- Location often closer to employment centers
- No MUD taxes (typically)
Resale Home Disadvantages:
- Potential for deferred maintenance
- May need updates or repairs
- Older systems and appliances
- Less energy efficient
- No warranties (unless purchased separately)
- Layout may be dated
The Right Choice Depends On:
- Budget: Resale offers more house for less money initially
- Timeline: Resale offers immediate occupancy; new construction has 3-9 month build times
- Maintenance comfort: New construction eliminates immediate repair concerns
- Location priorities: Resale often provides better locations; new construction offers newer areas
Many first-time buyers in North Texas choose new construction in communities like Harvest, Pecan Square, Treeline, or Landmark for the combination of modern features, warranties, and master-planned amenities despite higher costs.
Master-Planned Communities
Master-planned communities represent a growing share of North Texas real estate, particularly for first-time buyers seeking turnkey lifestyles.
What Defines Master-Planned Communities:
- Comprehensive long-term development planning
- Resort-style amenity centers (pools, fitness, event spaces)
- Year-round lifestyle programming and events
- Extensive trail networks and parks
- Mixed-use development (residential, commercial, retail)
- Architectural standards maintaining visual cohesion
- Higher HOA fees funding amenities and programming
North Texas Master-Planned Community Examples:
Harvest by Hillwood (Argyle/Northlake):
- 1,200 acres, 4,000+ homes at buildout
- Agrihood concept with farm-to-table programming
- The Farmhouse amenity center
- Argyle ISD and Northwest ISD schools
- High $300s to $1M+ pricing
Pecan Square by Hillwood (Northlake):
- 1,200 acres, 3,100 homes at buildout
- Town Square with Jackson Hall, The Arena, The Greeting House
- 300+ annual lifestyle events
- Northwest ISD schools
- $450,000-$650,000+ pricing
Treeline by Hillwood (Justin):
- 800+ acres, 2,500+ homes at buildout
- Preserved tree canopy, natural setting
- Alliance corridor access
- Northwest ISD schools
- High $300s to low $600s pricing
Landmark by Hillwood (Denton):
- 3,200 acres, 6,000+ homes at buildout
- Nature-centric design around Pilot Knob Hill
- 1,100 acres Parks & Wilds preserved
- Denton ISD schools
- Mid-$400s to $2M+ pricing (2026 launch)
Why First-Time Buyers Choose Master-Planned Communities:
- Turnkey lifestyle: Amenities and programming create instant community
- Strong schools: Most built in highly-rated districts
- Future value: Comprehensive planning supports long-term appreciation
- New construction: Modern homes with warranties
- Safety: Planned infrastructure and community-focused design
The Tradeoff:
Master-planned communities typically cost $25,000-$75,000 more than comparable resale homes and carry higher HOA fees ($100-$200/month). Evaluate whether the amenities and lifestyle programming justify the additional cost for your family.
Property Taxes and MUD Districts
Texas has no state income tax, which means property taxes fund local services. Understanding property tax implications is essential for first-time buyers.
Texas Property Tax Rates (2026):
Property taxes vary significantly by location. Approximate effective rates in first-time buyer areas:
- Denton County communities: 2.0-2.5% of assessed value
- Collin County communities: 2.2-2.6% of assessed value
- Tarrant County communities: 2.1-2.5% of assessed value
- Dallas County communities: 2.3-2.7% of assessed value
What This Means:
On a $350,000 home in Denton County at 2.2% effective rate:
- Annual property taxes: $7,700
- Monthly tax escrow: $642
Homestead Exemption:
Texas offers homestead exemptions that reduce your taxable value:
- Basic homestead exemption (varies by taxing entity)
- School district exemption (typically $100,000)
- Over-65 exemptions (for seniors)
- Disabled veteran exemptions
Apply for homestead exemption immediately after closing. It can reduce your annual taxes by $1,000-$3,000.
MUD Taxes (Municipal Utility Districts):
Many new construction communities in developing areas are in MUD districts. MUDs are special districts that fund water, sewer, drainage, and infrastructure.
How MUD Taxes Work:
- MUD taxes appear as a separate line item on your property tax bill
- Rates typically range from $0.25 to $1.40 per $100 of home value
- MUD taxes are IN ADDITION TO regular property taxes
Example:
$350,000 home in area with $0.80 MUD rate:
- MUD taxes: $2,800/year = $233/month
- Combined with regular taxes: $7,700 + $2,800 = $10,500/year = $875/month
MUD Tax Considerations:
- MUD taxes typically decline as bonds are paid off (10-20 year timelines)
- MUD rates vary significantly between communities
- Newer developments often have higher MUD rates
- Factor MUD taxes into your total housing payment calculation
Always ask about MUD taxes when evaluating properties in new construction areas.
Part 3: The Home Search Process
Working with a Buyer's Agent
Whether to use a real estate agent is not really a question for most first-time buyers—the answer is yes.
Why Buyer's Agents Matter:
- Market expertise: Knowledge of neighborhoods, pricing, and trends
- Access to listings: MLS access, off-market opportunities, coming-soon properties
- Negotiation skills: Experience getting best prices and terms
- Transaction management: Coordinating inspections, appraisals, repairs, closing
- Protecting your interests: Advocating for you throughout the process
Cost:
Buyer's agent compensation is typically paid through the transaction and is already factored into home prices. You get professional representation at no additional direct cost.
Finding the Right Agent:
Look for agents who:
- Specialize in first-time buyers
- Have deep knowledge of your target areas
- Communicate in your preferred style and frequency
- Provide clear education about the process
- Have strong negotiation track records
Questions to Ask Potential Agents:
- "How many first-time buyers have you helped in the past year?"
- "What's your experience in [specific areas you're interested in]?"
- "How do you typically communicate with clients?"
- "Can you provide references from recent first-time buyer clients?"
- "What's your approach to helping buyers in competitive situations?"
Red Flags:
- Pushing you to see homes above your budget
- Discouraging you from thorough inspections
- Rushing you to make offers without time to consider
- Poor communication or unresponsiveness
- Unwillingness to answer questions or provide education
Setting Your Search Parameters
Define clear criteria before starting your search to stay focused and efficient.
Must-Haves vs. Nice-to-Haves:
Must-Haves (non-negotiable):
- Number of bedrooms
- Location/school district
- Budget ceiling
- Key features essential for your lifestyle
Nice-to-Haves (flexible):
- Specific upgrades or finishes
- Pool or certain amenities
- Particular layout preferences
- Neighborhood characteristics
Common First-Time Buyer Must-Haves:
- 3-4 bedrooms
- 2+ bathrooms
- 2-car garage
- Move-in ready condition (or comfortable with DIY)
- Good schools (even without children, for resale value)
- Safe neighborhood
- Reasonable commute
Location Factors:
- Daily commute time and route
- School ratings and assignments
- Proximity to shopping, dining, entertainment
- Access to parks, trails, recreation
- Neighborhood character and demographics
- Future development plans for area
The Home Search Timeline:
Most first-time buyers search for 2-4 months before finding the right home. Some find homes faster; others take 6+ months. Patience combined with clear criteria leads to best outcomes.
Evaluating Properties
As you tour homes, evaluate systematically to make informed comparisons.
Initial Evaluation (Online):
Before scheduling showings:
- Price within budget?
- Meets must-have criteria?
- Location works for lifestyle?
- Photos show acceptable condition?
- Days on market reasonable? (Very new or very old listings merit questions)
In-Person Showing Evaluation:
Exterior:
- Foundation condition (cracks, settling, drainage)
- Roof condition (missing shingles, sagging, age)
- Siding or brick condition
- Window and door condition
- Driveway and walkway condition
- Drainage and grading
- Landscaping maintenance level
Interior:
- Floor plan flow and functionality
- Room sizes adequate for furniture and use
- Natural light
- Ceiling height
- Storage space (closets, pantry, garage)
- Kitchen layout and appliances
- Bathroom count and condition
- HVAC vents in all rooms
- Electrical outlets sufficient and properly located
- Paint and flooring condition
- Signs of water damage (stains, odors, soft spots)
- Signs of foundation issues (doors/windows not closing properly, cracks)
Systems:
- HVAC age and operation
- Water heater age and size
- Electrical panel capacity
- Plumbing fixtures operation
- Windows open/close and seal properly
Neighborhood:
- Drive around at different times of day
- Observe property maintenance levels
- Note traffic patterns and noise
- Check for commercial development nearby
- Assess walkability and safety
Take Photos and Notes:
After viewing 5-10 homes, they blend together. Photos and notes help you remember and compare properties later.
Making the Decision
You've found a home you like. How do you know if it's the right one?
Questions to Ask Yourself:
- Does it meet my must-haves?
- Can I afford the total monthly payment comfortably?
- Will it serve my needs for at least 5-7 years? (First homes are rarely forever homes)
- Are there any deal-breakers I'm overlooking because I'm excited?
- Have I done enough research to know this is fairly priced?
- Am I comfortable with the neighborhood and area?
- What repairs or updates will it need, and can I afford them?
The "Sleep On It" Rule:
If you find a home you love, sleep on it before making an offer (unless multiple offers are imminent). Emotion drives many housing decisions, but you want logic to confirm your choice.
Trust Your Gut:
After logical evaluation, trust your instincts. If something feels wrong about a property, neighborhood, or situation, listen to that feeling. There will be other homes.
Part 4: Common First-Time Buyer Mistakes to Avoid
Financial Mistakes
1. Not Getting Pre-Approved (Only Pre-Qualified)
Pre-qualification is an estimate. Pre-approval involves credit check and documentation review. Sellers want pre-approval.
2. Maxing Out Your Budget
Lenders approve you for maximum affordable payment—not necessarily comfortable payment. Leave room for life changes, maintenance, and unexpected expenses.
3. Ignoring Total Cost of Homeownership
Don't just consider principal and interest. Include:
- Property taxes
- Insurance
- HOA fees
- Utilities (often higher than apartments)
- Maintenance
- MUD taxes (if applicable)
4. Draining Savings for Down Payment
Keep emergency funds. Don't put every dollar into down payment and closing costs.
5. Making Major Purchases Before Closing
Don't buy furniture, cars, or anything else on credit before closing. Lenders re-check credit before funding.
6. Changing Jobs During the Process
Wait until after closing to change employment. Job changes can delay or cancel loans.
House Hunting Mistakes
7. Falling in Love with the First House
See multiple properties before deciding. First homes often aren't best homes.
8. Focusing Only on Pretty Finishes
Paint colors and landscaping are easy to change. Focus on location, layout, bones, and systems.
9. Overlooking Location for House Features
You can change a house. You can't change location, schools, or commute.
10. Buying the Most Expensive House in the Neighborhood
Harder to sell later. Better to be average or slightly below average price for the area.
11. Not Researching the Neighborhood
Drive through at different times. Check crime statistics. Talk to potential neighbors. Research future development plans.
Inspection and Due Diligence Mistakes
12. Skipping the Home Inspection
Never skip inspection to save money or make offer more competitive. $500 inspection can save you $50,000 in unknown repairs.
13. Not Attending the Inspection
Attending helps you understand your home and builds relationship with inspector who can answer questions.
14. Being Unreasonable About Inspection Findings
Every home has issues. Prioritize major problems and accept minor imperfections.
15. Not Getting Foundation Inspection in Texas
Foundation issues are common in Texas. Always get foundation inspection separately.
Negotiation Mistakes
16. Getting Emotionally Attached
Stay objective until closing. Don't let emotion drive bad financial decisions.
17. Offering Full Price Without Negotiating
Even in competitive markets, negotiation on terms (closing timeline, seller concessions) may work when price won't budge.
18. Lowballing in Competitive Markets
Unreasonably low offers waste everyone's time and may eliminate you from consideration on properties you actually want.
Closing and Post-Closing Mistakes
19. Not Reading Closing Documents
Read everything. Ask questions. Don't sign what you don't understand.
20. Forgetting to Apply for Homestead Exemption
This exemption saves thousands annually. Apply between January 1 and April 30 after moving in.
21. Neglecting Maintenance
Small problems become big problems. Stay on top of basic maintenance.
22. Over-Improving Immediately
Don't spend $50,000 renovating your first year. Live in the house first, understand what you actually need, and save for improvements.
Part 5: Understanding Your Loan Options
Now that you understand common pitfalls to avoid, let's explore the financing options that will make your home purchase possible. Choosing the right loan program can save you thousands of dollars and make the difference between qualifying for your dream home or settling for less. Each loan type has distinct advantages depending on your credit profile, down payment capacity, and long-term homeownership plans.
The Miranda Realty Team works with trusted lender partners who specialize in first-time buyer programs and can help you explore which loan option best fits your unique situation. We're happy to connect you with experienced loan officers who understand North Texas programs, down payment assistance, and competitive rates.
Conventional Loans
Conventional loans are mortgages not backed by the federal government. They're offered by private lenders and conform to standards set by Fannie Mae and Freddie Mac.
Key Features:
- Down payment: As low as 3% for first-time buyers through programs like Conventional 97, HomeReady, HomeOne, and Home Possible
- Credit score: Minimum 620, though 640-660 more common for best terms
- DTI: Typically 43% maximum, up to 50% with compensating factors
- PMI: Required with less than 20% down, but can be removed once you reach 20% equity
- Loan limits: $832,750 for most of North Texas (2026); higher in some areas
Advantages:
- PMI can be removed at 20% equity (unlike FHA where MIP typically lasts loan life)
- Lower overall costs if you have good credit (680+)
- More property types eligible
- Easier to qualify for second home or investment property later
Best For:
- Buyers with credit scores 680+
- Buyers who plan to build equity and remove PMI
- Buyers purchasing standard single-family homes or condos
Special Conventional Programs:
Conventional 97 / 97% LTV:
- 3% down payment
- Must be first-time buyer (no homeownership in past 3 years)
- Must be primary residence
- Minimum 620 credit score
- No income limits
HomeReady (Fannie Mae):
- 3% down payment
- Income limits apply (typically 100% of area median income)
- Can include non-borrower household income for qualification
- Requires homebuyer education course
- Slightly lower PMI rates
- Minimum 620 credit score
Home Possible (Freddie Mac):
- 3% down payment
- Income limits apply
- Similar to HomeReady with slightly different requirements
- Requires homebuyer education course
- Minimum 660 credit score
HomeOne (Freddie Mac):
- 3% down payment
- For first-time buyers
- No income limits
- Minimum 620 credit score
FHA Loans
FHA loans are insured by the Federal Housing Administration, making them more accessible to buyers with lower credit scores or higher debt ratios.
Key Features:
- Down payment: 3.5% with credit score 580+; 10% with credit score 500-579
- Credit score: Minimum 580 for 3.5% down (some lenders require 600-620)
- DTI: Up to 50-57% with automated underwriting
- MIP: Both upfront (1.75% of loan amount) and annual (0.55-0.85%)
- Loan limits: $541,287 for most of North Texas (2026)
Advantages:
- Lower credit score requirements
- Higher DTI allowance
- Down payment can come entirely from gifts
- Easier qualification with past credit problems
Disadvantages:
- Mortgage insurance required for life of loan (if less than 10% down)
- Stricter property standards (home must meet FHA safety/security requirements)
- Sellers may be less receptive to FHA offers due to appraisal requirements
- Upfront MIP (1.75%) added to loan amount
FHA Mortgage Insurance:
FHA requires two types of mortgage insurance:
Upfront MIP: 1.75% of base loan amount, typically rolled into the loan
- Example: $332,500 loan = $5,819 upfront MIP
Annual MIP: 0.55%-0.85% depending on loan amount, loan-to-value ratio, and loan term
- Example: $332,500 loan at 0.55% = $1,829/year = $152/month
For loans with less than 10% down, annual MIP remains for the life of the loan. With 10%+ down, MIP cancels after 11 years.
Best For:
- Buyers with credit scores 580-680
- Buyers with higher debt-to-income ratios
- Buyers who've experienced past credit problems (bankruptcy, foreclosure) and have waited the required time periods
When FHA Makes Sense vs. Conventional:
FHA often provides better terms if:
- Your credit score is below 680
- You have limited savings for down payment
- Your DTI is above 43%
- You've had past credit issues
Conventional typically works better if:
- Your credit score is 680+
- You can put 5-10% down
- You want to remove mortgage insurance eventually
VA Loans
VA loans are guaranteed by the Department of Veterans Affairs for eligible military members, veterans, and surviving spouses.
Key Features:
- Down payment: $0 required
- Credit score: No VA minimum, but lenders typically require 580-620
- DTI: No official maximum, but lenders typically cap at 41%
- Funding fee: 2.15%-3.3% (can be rolled into loan); waived for disabled veterans
- Loan limits: $832,750 for most of North Texas (2026) with full entitlement; no limit with sufficient entitlement
Eligibility:
- Active duty military (90+ consecutive days during wartime, 181+ days during peacetime)
- Veterans with honorable discharge
- National Guard and Reserves (6+ years of service)
- Surviving spouses of service members who died in service or from service-related disabilities
Advantages:
- No down payment required
- No monthly mortgage insurance
- Competitive interest rates
- Lenient credit requirements
- Can be used multiple times
- Assumable by future buyers
Disadvantages:
- VA funding fee (unless disability waiver)
- Property must meet VA minimum property requirements
- Sellers may prefer conventional or cash offers
- Limited to primary residences only
VA Funding Fee:
First-time VA loan use:
- 0% down: 2.15% funding fee
- 5% down: 1.5% funding fee
- 10% down: 1.25% funding fee
Subsequent VA loan use:
- 0% down: 3.3% funding fee
- 5% down: 1.5% funding fee
- 10% down: 1.25% funding fee
Disabled veterans with VA disability ratings are exempt from funding fees.
Best For:
- Eligible military members and veterans
- Buyers who want $0 down without monthly mortgage insurance
- Buyers purchasing in competitive markets where $0 down enables larger budgets
USDA Loans
USDA loans support rural development by offering $0 down payment loans in eligible areas.
Key Features:
- Down payment: $0 required
- Credit score: 640 minimum for automated underwriting
- Income limits: 115% of area median income
- Location: Must be in USDA-eligible rural area
- Guarantee fee: 1% upfront + 0.35% annual
Eligibility:
USDA loans require properties to be in designated rural areas. In the DFW metroplex, most urban areas are ineligible, but many surrounding communities qualify. Check eligibility at https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
Eligible areas near North Texas include:
- Parts of western Denton County
- Rural areas in Wise County
- Portions of Collin County
- Many smaller towns and unincorporated areas
Advantages:
- $0 down payment
- Competitive interest rates
- Lower mortgage insurance than FHA
Disadvantages:
- Limited to eligible rural areas
- Income limits may disqualify higher earners
- Property value limits apply
- Guarantee fee required
Best For:
- Buyers willing to live in eligible rural/suburban areas
- Buyers who meet income limits
- Buyers seeking $0 down without military service
Comparing Monthly Costs Across Loan Types
Understanding how different loans impact your monthly payment helps you make informed decisions.
Example: $350,000 Purchase Price
Conventional (5% down, 680 credit score):
- Loan amount: $332,500
- Interest rate: 6.5%
- Principal & Interest: $2,102
- PMI: $166/month
- Total P&I + PMI: $2,268/month
FHA (3.5% down, 620 credit score):
- Loan amount: $344,070 (includes upfront MIP)
- Interest rate: 6.25%
- Principal & Interest: $2,119
- MIP: $157/month
- Total P&I + MIP: $2,276/month
VA (0% down, 660 credit score, first-time use):
- Loan amount: $357,525 (includes funding fee)
- Interest rate: 6.0%
- Principal & Interest: $2,143
- No monthly mortgage insurance
- Total P&I: $2,143/month
All examples exclude property taxes, insurance, and HOA fees which vary by property.
Part 6: Texas First-Time Homebuyer Programs and Assistance
Texas offers several programs specifically designed to help first-time buyers overcome financial barriers.
My First Texas Home (TDHCA)
Provider: Texas Department of Housing and Community Affairs
What It Offers:
- 30-year fixed-rate mortgage with competitive interest rate
- Down payment and closing cost assistance up to 5% of loan amount
- Assistance provided as zero-interest deferred second loan
- Works with FHA, VA, USDA, and conventional loans
How It Works:
The 5% assistance is structured as a deferred second lien on your property. You don't make monthly payments on this loan. It's only repaid when you:
- Sell the property
- Refinance the first mortgage
- Pay off the first mortgage
- No longer occupy the home as your primary residence
Eligibility Requirements:
- First-time homebuyer (no homeownership as primary residence in past 3 years)
- Veterans exempt from the 3-year requirement
- Income limits apply (vary by county)
- Credit score typically 620+ (varies by loan type)
- Must complete homebuyer education course
- Property must be in Texas
Income Limits (Examples for North Texas):
Income limits vary by household size and county. As of 2026:
- Denton County: Approximately $110,000 for 1-2 person household, higher for larger households
- Tarrant County: Approximately $105,000 for 1-2 person household
- Collin County: Approximately $115,000 for 1-2 person household
Check current limits at https://www.tdhca.texas.gov
Why It Matters:
On a $350,000 purchase, 5% assistance = $17,500. This could cover your entire down payment plus most closing costs, meaning you might buy a home with only a few thousand dollars out of pocket.
My Choice Texas Home (TDHCA)
Provider: Texas Department of Housing and Community Affairs
What It Offers:
- 30-year fixed-rate mortgage
- Down payment and closing cost assistance up to 5% of loan amount
- Available to repeat homebuyers (not just first-time buyers)
- Works with FHA, VA, USDA, and conventional loans
Key Difference from My First Texas Home:
This program doesn't require first-time buyer status, making it accessible to anyone meeting income and credit requirements.
Eligibility:
Similar to My First Texas Home, but without the first-time buyer requirement.
Home Sweet Texas Home Loan (TSAHC)
Provider: Texas State Affordable Housing Corporation
What It Offers:
- 30-year fixed-rate mortgage (conventional or government-backed)
- Up to 5% down payment assistance as either:
- Grant (does not need to be repaid), OR
- Zero-interest second mortgage (forgiven after 3 years if you remain in home)
- Can be combined with Texas Mortgage Credit Certificate (MCC)
Eligibility Requirements:
- First-time homebuyer (some exceptions for repeat buyers in targeted areas)
- Income limits vary by county
- Credit score requirements vary by loan type (typically 620+ for conventional, 580+ for FHA)
- Must complete homebuyer education course
- Purchase price limits apply
The 3-Year Forgivable Loan:
If you choose the forgivable loan option rather than the grant, the assistance is forgiven at a rate of 33.33% per year:
- After 1 year: 33.33% forgiven
- After 2 years: 66.66% forgiven
- After 3 years: 100% forgiven
If you sell or refinance before 3 years, you repay the remaining unforgiven balance.
Homes for Texas Heroes (TSAHC)
Provider: Texas State Affordable Housing Corporation
What It Offers:
- 30-year fixed-rate mortgage
- Up to 5% down payment assistance
- Available to eligible professionals in specific fields
- Open to repeat homebuyers
Eligible Professions:
- Teachers and education professionals (including administrators, counselors, librarians)
- Firefighters (including volunteer firefighters with 5+ years)
- EMS personnel
- Police officers and law enforcement
- Correctional officers
- Veterans (honorably discharged)
Why It's Valuable:
If you work in one of these professions, you're eligible regardless of whether you've owned a home before, expanding your options significantly.
Texas Mortgage Credit Certificate (MCC)
What It Is:
A Texas MCC is not a loan program but a federal tax credit that reduces your annual tax liability based on the mortgage interest you pay.
How It Works:
The MCC allows you to claim a tax credit for 20-40% of the mortgage interest you pay annually. This credit directly reduces your federal income taxes dollar-for-dollar (unlike a deduction which only reduces taxable income).
Example:
Annual mortgage interest paid: $20,000 MCC rate: 20% Annual tax credit: $4,000 Monthly benefit: $333
This $333/month effectively reduces your housing payment, significantly improving affordability and potentially helping you qualify for a larger loan amount.
Key Points:
- The MCC lasts for the life of your mortgage
- You still deduct remaining mortgage interest (80% in example above)
- If the credit exceeds your tax liability, the excess can carry forward up to 3 years
- MCC can be combined with many down payment assistance programs
- One-time fee typically $500-$1,000
Eligibility:
- Must be first-time homebuyer
- Income limits apply
- Purchase price limits apply
- Must be primary residence
Lenders and the MCC:
When calculating your debt-to-income ratio, many lenders allow you to reduce your effective monthly mortgage payment by the estimated MCC benefit, potentially qualifying you for a larger loan amount.
How to Access These Programs
Step 1: Determine Eligibility
Review income limits, purchase price limits, and first-time buyer requirements for programs that interest you. Most programs provide online eligibility pre-screeners.
Step 2: Complete Homebuyer Education
Most programs require completion of an approved homebuyer education course. Courses are available:
- Online (typically $75-$150, 6-8 hours)
- In-person through HUD-approved counseling agencies
- Through your lender's recommended providers
Complete this early—you'll need your certificate before closing.
Step 3: Work with Approved Lenders
Not all lenders participate in these programs. When shopping for lenders, ask specifically:
- "Do you participate in TDHCA programs?"
- "Can you help me access TSAHC programs?"
- "Do you offer the Texas MCC program?"
Some lenders specialize in first-time buyer programs and can navigate multiple options simultaneously.
Step 4: Apply Early
Some programs have limited funding that can run out. Apply as early in the homebuying process as possible, ideally when you're getting pre-approved for your mortgage.
Combining Programs for Maximum Benefit
You can often stack programs to maximize assistance:
Example Combination:
Home Sweet Texas Home (5% down payment assistance)
- Texas MCC (20% tax credit on mortgage interest)
- Seller concessions (2-3% toward closing costs) = Potential to buy a home with minimal out-of-pocket cash while reducing ongoing monthly costs
Work with experienced loan officers who understand how to structure these combinations legally and effectively.
Part 7: Making an Offer and Negotiations
Determining Your Offer Price
Your offer should balance competitiveness with financial prudence.
Research Comparable Sales:
Your agent will provide a Comparative Market Analysis (CMA) showing recent sales of similar homes. Look for:
- Sold homes (not active listings) in past 3-6 months
- Similar size, age, condition, location
- Sale price vs. list price (shows market strength)
- Days on market (shows demand level)
Market Conditions:
Seller's Market (low inventory, high demand):
- Homes sell at or above list price
- Multiple offers common
- Contingencies waived
- Quick closings expected
Buyer's Market (high inventory, lower demand):
- Homes sell below list price
- Single offers typical
- Contingencies accepted
- Flexible terms possible
Balanced Market:
- Mix of above and below list price sales
- Negotiation on both price and terms
- Contingencies typically accepted
2026 North Texas Market Context:
The North Texas market in early 2026 is moderately balanced, with pockets of competition in highly desirable areas (new construction in master-planned communities, top school districts) and more negotiating room in other areas.
Pricing Strategies:
Full Price or Above: Use when multiple offers expected, you absolutely want the home, and price is justified by comps.
Slightly Below List: Standard approach in balanced markets. Offers 2-5% below list often work if home has been listed 30+ days.
Significantly Below List: Risky unless home has major issues, has been on market 90+ days, or you're prepared to walk away.
Structuring Your Offer
Beyond price, multiple factors create your complete offer.
Key Offer Components:
Purchase Price: Total amount you're offering
Earnest Money: Shows seller you're serious, typically $1,000-$5,000 in Texas. Goes toward your down payment at closing.
Option Fee: Texas-specific, typically $100-$500. Gives you 7-10 days to inspect and back out for any reason while protecting your earnest money.
Financing Terms:
- Conventional, FHA, VA, or cash
- Down payment percentage
- Pre-approval letter attached
Closing Timeline: Typically 30-45 days. Some sellers prefer longer or shorter timelines.
Seller Concessions: Seller contribution toward your closing costs. Typically 2-3% of purchase price in buyer-favorable markets.
Contingencies:
- Financing contingency (standard)
- Inspection contingency (negotiable - covered by option period in Texas)
- Appraisal contingency (often not included in Texas contracts, but can be negotiated)
- Home sale contingency (rarely accepted unless strong buyer's market)
Included Items: Specify which appliances, fixtures, and personal property convey.
Example Strong Offer (Competitive Market):
- Price: $355,000 (list price)
- Earnest money: $3,000
- Option fee: $500 for 10-day option period
- Financing: Conventional with 5% down, pre-approval attached
- Closing: 30 days
- Seller concessions: $3,000 toward closing costs
- Contingencies: Financing only
- Clean offer, ready to close quickly
Example Strategic Offer (Balanced Market):
- Price: $342,000 (list $350,000, 30 days on market)
- Earnest money: $3,000
- Option fee: $300 for 7-day option period
- Financing: FHA with 3.5% down, pre-approval attached
- Closing: 45 days
- Seller concessions: $7,000 toward closing costs
- Contingencies: Financing
- Reasonable offer with room for negotiation
Negotiating
After submitting your offer, sellers can accept, counter, or reject.
Counter-Offers:
Sellers typically counter on:
- Price (meeting somewhere in the middle)
- Closing timeline
- Repairs or seller concessions
- Contingencies
Your Response Options:
- Accept the counter if terms are acceptable
- Counter the counter with revised terms
- Stand firm on your original offer
- Walk away if seller won't meet your needs
Negotiation Tips for First-Time Buyers:
- Stay calm and patient. Negotiations can involve multiple rounds over several days.
- Communicate through your agent. Don't contact sellers directly.
- Know your limits. Decide your maximum price and minimum acceptable terms before entering negotiations.
- Be willing to compromise. Perfect deals are rare. Determine what matters most.
- Don't fall in love before closing. Stay objective until the house is yours.
When to Walk Away:
- Seller's price expectations exceed market value by significant margin
- Seller unwilling to negotiate on necessary repairs
- Your maximum comfortable payment exceeded
- Red flags discovered during negotiations (seller dishonesty, hidden problems)
- Better options available
Remember: There will always be other homes. Don't let emotion drive you into a bad financial decision.
Part 8: The Option Period and Inspections
Understanding the Texas Option Period
The option period is a unique Texas contract feature giving buyers a defined window to inspect, evaluate, and terminate the contract for any reason while protecting their earnest money.
How It Works:
- Buyer pays non-refundable option fee ($100-$500 typical)
- Buyer gets 7-10 days (negotiated) to conduct all due diligence
- During option period, buyer can terminate for any reason and receive earnest money back (but loses option fee)
- After option period expires, earnest money at risk if buyer backs out
What Happens During Option Period:
- Home inspections
- Specialist inspections (foundation, roof, etc.)
- Appraisal (if lender orders quickly)
- Final decision-making
- Repair negotiations
Strategic Use:
Option periods create leverage. Sellers know you can walk away, which motivates them to negotiate reasonable repair requests during this window.
The Home Inspection
Why Inspections Matter:
Professional inspectors evaluate:
- Roof condition and life expectancy
- Foundation integrity
- HVAC systems operation and age
- Plumbing systems and fixtures
- Electrical systems and safety
- Appliances
- Windows and doors
- Insulation and ventilation
- Structural components
- Grading and drainage
Choosing an Inspector:
Look for:
- Licensed and insured in Texas
- Member of professional organization (TREC, InterNACHI)
- Experience with your property type
- Detailed written reports
- Allows you to attend inspection
Cost: $300-$600 depending on home size and age
Attending Your Inspection:
Always attend if possible. Inspectors explain findings in person, helping you understand:
- Severity of issues
- Typical repair costs
- Maintenance recommendations
- Items requiring immediate attention
Reading the Inspection Report:
Reports identify issues in categories:
- Safety concerns: Require immediate attention
- Major defects: Expensive repairs needed soon
- Maintenance items: Normal wear requiring eventual attention
- Cosmetic issues: Aesthetic concerns without functional impact
Every home has issues. The question is whether issues are acceptable given the price and your budget for repairs.
Specialist Inspections
Depending on the property and general inspection findings, consider specialist inspections:
Foundation Inspection: $350-$600
- Recommended for all Texas homes (expansive soils cause foundation movement)
- Engineer provides detailed report on foundation condition
- Essential if general inspector notes concerns
Roof Inspection: $200-$400
- Detailed assessment of roof condition and remaining life
- Important for roofs 10+ years old or with visible damage
- Many roofing companies offer complimentary roof evaluations
HVAC Inspection: $150-$300
- Detailed system evaluation
- Recommended for systems 10+ years old
Plumbing Inspection: $200-$500
- Camera inspection of sewer lines
- Important for homes 20+ years old or on septic systems
Mold/Air Quality Testing: $300-$800
- If musty odors, visible mold, or moisture concerns present
Pool Inspection: $200-$400
- If property has pool
Most first-time buyers order general inspection at minimum.
Negotiating Repairs
After receiving inspection reports, you have options:
Option 1: Request Repairs
Ask seller to complete specific repairs before closing. This works best for:
- Safety issues
- Major system failures
- Roof leaks or damage
- Foundation problems requiring immediate mitigation
Advantages: Problems fixed before you take ownership Disadvantages: You don't control quality of work; seller uses cheapest contractors
Option 2: Request Credit
Ask for closing cost credit to address repairs yourself after closing.
Advantages: You control repairs and contractor selection Disadvantages: You must handle repairs; reduces your closing cash
Option 3: Request Price Reduction
Ask for purchase price reduction to account for needed repairs.
Advantages: Reduces loan amount and monthly payment Disadvantages: Must handle repairs; reduces your cash for repairs
Option 4: Accept As-Is
Proceed without requesting repairs or credits if issues are acceptable.
How Much to Request:
- Get contractor estimates for major repairs
- Request 50-100% of estimated repair costs depending on market conditions
- Prioritize most important items if seller pushes back
Negotiation Reality:
Sellers are more motivated to address:
- Safety issues
- Items that will affect other buyers if you walk
- Problems disclosed in their listing
- Issues that were genuinely unknown
Sellers resist:
- Long lists of minor items
- Cosmetic repairs
- Normal maintenance items
- Issues priced into the listing
Be Reasonable:
Don't expect sellers to deliver a perfect home. Focus on significant issues and be willing to accept some items as-is. Unreasonable requests can kill deals.
Part 9: The Closing Process
From Contract to Closing
After your option period ends and repairs are resolved, you enter the closing timeline.
Key Steps (Weeks 2-4):
Week 2:
- Lender orders appraisal
- Title company begins title search
- Homeowners insurance shopping begins
Week 3:
- Appraisal completed
- Final loan documents submitted to underwriting
- Title work continues
- Insurance binder secured
Week 4:
- Final underwriting approval
- Clear to close issued
- Closing disclosure provided (must be received 3 business days before closing)
- Final walk-through scheduled
- Closing scheduled
- Set up utilities and services for transfer on closing day (electric, gas, water/sewer, trash service)
Your Responsibilities:
- Respond promptly to lender document requests
- Maintain employment and credit status (don't change jobs, open new credit, or make large purchases)
- Secure homeowners insurance
- Arrange utilities transfer
- Prepare for final walk-through
- Review closing disclosure carefully
- Arrange for certified funds for closing
The Appraisal
Lenders require appraisals to confirm the property value supports the loan amount.
The Appraisal Process:
- Lender orders appraisal (you pay, typically $500-$700)
- Appraiser visits property and measures
- Appraiser researches comparable sales
- Appraiser provides report to lender within 7-10 days
Appraisal Outcomes:
At or Above Purchase Price: Loan proceeds as planned
Below Purchase Price: Creates challenges
- Lender only lends based on appraised value, not purchase price
- Buyer must bring additional cash to cover difference, OR
- Seller reduces price to appraised value, OR
- Buyer and seller split difference, OR
- Deal terminates
Example:
Purchase price: $350,000 Appraised value: $340,000 Loan amount: 95% of $340,000 = $323,000 (not $332,500 as expected) Buyer needs additional $10,000 cash OR must renegotiate
Appraisal Contingency:
Many Texas contracts don't include appraisal contingencies, meaning buyers can't back out due to low appraisal without losing earnest money. Some buyers negotiate appraisal contingencies in their offers for protection.
If Appraisal Comes in Low:
- Request appraisal reconsideration with additional comparable sales data
- Negotiate price reduction with seller
- Bring additional cash if financially possible
- Terminate contract if terms allow
Homeowners Insurance
Lenders require homeowners insurance, and you should secure coverage during the closing timeline.
Required Coverage:
- Dwelling coverage: Rebuilds home if destroyed
- Personal property: Replaces contents
- Liability: Protects against lawsuits for injuries on property
- Additional living expenses: Covers housing if home uninhabitable
Texas-Specific Considerations:
- Wind/hail: Often separate or additional coverage in Texas
- Flood insurance: Required if in flood zone, recommended elsewhere
- Foundation coverage: Ensure policy covers foundation damage (not all do)
Shopping for Insurance:
Get quotes from multiple insurers:
- Major carriers (State Farm, Allstate, Farmers)
- Regional carriers
- Independent agents representing multiple companies
Cost Factors:
- Home value and rebuilding cost
- Deductible amount
- Property age
- Claims history
- Credit score
- Security features (alarm, gates)
Typical Costs:
$1,200-$2,500/year for $300,000-$400,000 homes in North Texas
The Closing Disclosure
Three business days before closing, your lender provides your Closing Disclosure (CD)—a standardized form detailing all closing costs and loan terms.
Review Carefully:
- Loan amount matches expectations
- Interest rate correct
- Monthly payment as expected
- Closing costs align with Loan Estimate
- No unexpected fees
- Cash to close amount
Common CD Line Items:
Loan Costs:
- Origination charges
- Discount points (if purchased)
- Appraisal fee
- Credit report fee
- Flood certification
- Tax service fee
Other Costs:
- Title insurance
- Escrow/settlement fees
- Recording fees
- Transfer taxes
- HOA transfer fees
- Property taxes (prorated)
- Homeowners insurance (prepaid)
- HOA dues (prepaid)
Cash to Close Calculation:
Purchase price
- Closing costs
- Loan amount
- Earnest money already paid
- Seller concessions = Cash needed at closing
If Numbers Don't Match Expectations:
Contact your lender immediately. Errors can be corrected before closing, but become difficult after signing.
Final Walk-Through
Typically scheduled 24 hours before closing, the final walk-through verifies:
- Property is in agreed-upon condition
- Agreed repairs completed satisfactorily
- No new damage occurred since your last visit
- All fixtures, appliances, and items in contract remain
- Property is clean and ready for occupancy
What to Check:
- All agreed repairs completed
- Appliances present and operational
- Fixtures and hardware intact
- No new damage
- Utilities connected and working
- Property clean
- Garage door openers, keys, manuals present
If Issues Found:
- Minor issues: Proceed and address after closing
- Major issues: Delay closing until resolved or negotiate credit
Don't close if significant problems exist unless you're comfortable taking them on.
Closing Day
Closing day is when ownership transfers from seller to buyer.
What to Bring:
- Government-issued photo ID
- Certified check or proof of wire transfer for cash to close
- Proof of homeowners insurance
- Final walk-through documentation
Who Attends:
- You and your agent
- Closing agent (title company representative)
- Lender representative (sometimes)
What You'll Sign:
Many documents including:
- Closing disclosure (final version)
- Mortgage note (your promise to repay)
- Deed of trust (gives lender security interest)
- Affidavits and disclosures
- HOA documents
- Title company forms
The signing process takes 45-90 minutes. Ask questions about anything you don't understand—the closing agent explains each document.
After Signing:
- Receive keys to your new home
- Receive garage door openers, codes, manuals
- Ownership officially transfers after recording (same day or next business day)
Congratulations—you're a homeowner!
Part 10: Your First Year of Homeownership
Immediate Tasks (Week 1)
Change the Locks
You don't know who has keys from previous owners. Change locks immediately for security.
Locate Shutoffs
Know where to shut off:
- Main water (prevents flooding emergencies)
- Gas (if applicable)
- Electrical breaker panel
Test Systems
- Smoke detectors and carbon monoxide detectors
- HVAC system
- Water heater
- Appliances
- Garage door safety features
Change HVAC Filters
Previous owners may not have changed filters recently. Start fresh.
Meet Your Neighbors
Introduce yourself. Neighbors often have helpful information about the neighborhood and local services.
Month 1 Priorities
Apply for Homestead Exemption
File with your county appraisal district. Reduces your property taxes by $1,000-$3,000 annually. Must apply between January 1 and April 30 of the year following your purchase.
Ongoing Maintenance Tasks
Monthly:
- Change HVAC filter (or every 3 months depending on filter type)
- Test smoke and CO detectors
- Check for leaks under sinks and around toilets
- Clear HVAC vents and returns
Quarterly:
- Clean gutters and downspouts
- Check weather stripping on doors and windows
- Inspect roof from ground for damage
- Check for foundation cracks
- Test garage door safety features
- Drain water heater (reduces sediment)
Twice Yearly:
- Service HVAC system (spring for A/C, fall for heat)
- Clean dryer vent
- Check caulking around tubs, showers, sinks
- Inspect attic for leaks, insulation issues
- Check exterior for needed paint touch-ups
Annually:
- Pump septic system (if applicable)
- Service irrigation system
- Check foundation for new cracks
- Refresh mulch in landscaping
- Inspect roof more thoroughly
Building Equity
Your home builds wealth through:
Mortgage Principal Paydown: Each payment reduces your loan balance. Early payments are mostly interest, but over time principal paydown accelerates.
Property Appreciation: Historically, North Texas home values appreciate 3-5% annually (not guaranteed).
Forced Savings: Unlike renting, your monthly payment builds equity rather than going entirely to a landlord.
How to Accelerate Equity Building:
- Make extra principal payments: Even $50-$100/month toward principal reduces interest and builds equity faster
- Make home improvements: Strategic upgrades increase value
- Refinance if rates drop significantly: Lower rate means more of each payment goes to principal
- Avoid cash-out refinancing: Taking equity out restarts your wealth-building
Over a typical 5-7 year holding period, first-time buyers may build significant equity through appreciation and principal paydown, though actual results vary based on market conditions, location, and specific community performance.
Part 11: Frequently Asked Questions
How much do I really need for a down payment in North Texas?
As little as 0% (VA, USDA), 3% (Conventional programs like Conventional 97, HomeReady, HomeOne), or 3.5% (FHA). Texas down payment assistance programs can provide up to 5% of purchase price, potentially reducing your out-of-pocket to just a few thousand dollars plus closing costs.
What credit score do I need to buy a home?
Minimums vary by loan type: FHA allows 580 (500 with 10% down), conventional typically requires 620-660, VA and USDA have no official minimums but lenders often require 580-640. Higher scores get better rates—each 20-40 point improvement can save you $30-$50/month.
How long does it take to buy a home?
From starting your search to closing typically takes 3-5 months: 1-2 months getting finances ready, 1-3 months finding the right home, 30-45 days from contract to closing.
Should I rent or buy in the current North Texas market?
If you plan to stay 5+ years, can afford the payments comfortably, and have stable employment, buying typically builds more wealth than renting. Calculate your break-even point: how long until equity building and appreciation offset closing costs and maintenance.
Can I buy a home if I have student loans?
Yes. Student loans affect your debt-to-income ratio but don't disqualify you. Lenders count either 1% of loan balance or actual payment toward monthly debts. Income-driven repayment plans help keep payments low for qualifying purposes.
What's better: FHA or conventional loan?
Depends on your credit and down payment. FHA works better with lower credit scores (580-680) and limited savings. Conventional works better with 680+ credit and ability to put 5%+ down. Run numbers with both to compare total costs.
Should I buy now or wait for lower interest rates?
Waiting for lower rates means paying rent instead of building equity, potentially missing current builder incentives, and risking higher home prices if demand increases when rates fall. You can refinance if rates drop, but you can't retroactively buy today's homes at today's prices.
What are MUD taxes and how much do they add to my payment?
MUD (Municipal Utility District) taxes fund infrastructure in developing areas. Rates range from $0.25-$1.40 per $100 of home value. On a $350,000 home with $0.80 MUD rate, expect approximately $2,800/year or $233/month additional. Always ask about MUD taxes in new construction areas.
How do I know if I'm overpaying for a home?
Your agent should provide comparable sales analysis. If recent sales of similar homes in similar condition sold for similar prices, you're likely paying fair market value. Overpaying happens when you exceed recent comps by 5-10%+ without justification.
Can I buy a home with my partner if we're not married?
Yes, but have an attorney draft a co-ownership agreement addressing: ownership percentage, payment responsibilities, what happens if someone wants to sell, and processes if relationship ends. Protect both parties legally.
Do I need a real estate attorney in Texas?
Texas doesn't require attorneys for real estate transactions. Title companies handle closing documents. However, some buyers hire attorneys to review contracts, especially in complex situations (new construction, multiple buyers, unusual contract terms).
Should I buy new construction or a resale home?
New construction offers warranties, modern features, energy efficiency, and no immediate maintenance but costs more and may have MUD taxes. Resale homes cost less, have mature landscaping, and established neighborhoods but may need updates and repairs. Your budget, timeline, and maintenance comfort level determine best choice.
How much should I offer below asking price?
Market dependent. In competitive markets, list price or above may be necessary. In balanced markets, 2-5% below list often works if home has been listed 30+ days. In buyer's markets, 5-10% below may be accepted. Always base offers on comparable sales, not arbitrary percentages.
What if I find a major problem after closing?
Sellers must disclose known issues. If they failed to disclose, you may have legal recourse. However, unknown issues become your responsibility. This is why thorough inspections during option period matter—find problems before closing.
How do first-time buyer programs work with conventional loans?
Programs like Conventional 97, HomeReady, HomeOne, and Home Possible are conventional loans with special terms for first-time buyers. They offer 3% down payment, sometimes lower PMI, and flexible qualification. Work with lenders experienced in these programs.
Your Path Forward
Buying your first home represents one of life's most significant milestones—financially, emotionally, and personally. The process feels overwhelming because it involves hundreds of decisions, substantial money, and often tight timelines.
But here's what thousands of successful first-time buyers in North Texas have discovered: armed with knowledge, realistic expectations, and professional guidance, the process becomes manageable. What seemed impossible—homeownership on a first-time buyer budget—becomes reality.
Key Takeaways for Your Journey:
You don't need 20% down. Programs exist for 0-3.5% down, and Texas assistance programs can provide up to 5% of your purchase price.
Your credit doesn't need to be perfect. Scores of 580-620 qualify for FHA loans; 620-660 qualify for conventional programs. Higher scores get better terms, but homeownership isn't reserved for 760+ credit.
The right home exists within your budget. North Texas offers diverse options from new construction in master-planned communities to established neighborhoods with character. Your perfect first home is out there.
Professional help matters. Experienced agents, lenders, and inspectors cost you nothing or save you thousands by helping you make informed decisions and avoid costly mistakes.
This is a marathon, not a sprint. Most buyers search 2-4 months before finding their home. Patience combined with preparation leads to best outcomes.
Your first home likely won't be your forever home. Most first-time buyers stay 5-7 years before upgrading. That's perfectly normal and expected.
You're building wealth. Each mortgage payment builds equity. Over 5-7 years, you'll likely build $50,000-$100,000+ in equity through principal paydown and appreciation—wealth that would have gone to a landlord through rent.
The North Texas real estate market in 2026 presents real opportunities for prepared first-time buyers. Builder incentives at 5-year highs, balanced market conditions, and accessible financing programs create a favorable environment for entering homeownership.
Your journey starts with a single step: getting pre-approved, connecting with an experienced agent, and beginning your search with realistic expectations and clear priorities.
The dream of homeownership is achievable. Thousands of first-time buyers in Denton, Argyle, Northlake, Justin, and across North Texas prove it every month.
Now it's your turn.
Take Your Next Step
Ready to start your first-time homebuyer journey in North Texas?
Contact the Miranda Realty Team:
📧 Email: [email protected]
📱 Call or Text: 940.577.2051
🌐 Learn More: mirandarealty.team/team
Subscribe to Alliance Network:
Get monthly updates on North Texas real estate, market trends, first-time buyer tips, and Alliance corridor developments:
🔗 beacons.ai/alliancenetworktx
Areas We Serve: Denton | Argyle | Northlake | Justin | Greater DFW
Our Mission:
Spirit-led counsel and straight talk (no fluff)
We specialize in helping first-time buyers, out-of-state relocations, and new construction purchases navigate North Texas real estate with confidence. Our team brings decades of combined experience, personal real estate investment success (6 homes bought and sold between Edson and Paige), and deep community knowledge to every transaction.
Related Resources
Continue Your North Texas Real Estate Education:
Visit our blog at mirandarealty.team/blog for comprehensive guides including:
- The Ultimate Guide to Buying New Construction in 2026 - Everything you need to know about builder contracts, design centers, lot selection, and master-planned communities
- Complete Home Buying Guide for North Texas - Our 11,000-word comprehensive resource covering every aspect of buying in our market
- Hillwood Communities Guides - Detailed profiles of Harvest, Pecan Square, Treeline, and Landmark master-planned communities
- School District Comparisons - In-depth analysis of Argyle ISD, Northwest ISD, and Denton ISD
- Market Updates - Monthly Alliance corridor market trends and analysis
- Financing Guides - Detailed breakdowns of loan programs, down payment assistance, and Texas homebuyer programs
Stay Connected:
Follow Alliance Network for ongoing market intelligence, community updates, and insider knowledge about North Texas real estate at beacons.ai/alliancenetworktx
A Final Word
The journey from first-time renter to first-time homeowner transforms lives. You're not just buying a house—you're investing in your future, building wealth, creating stability, and establishing roots in a community.
Every homeowner started where you are now: uncertain, overwhelmed, wondering if they could really do this. And every one discovered that with knowledge, preparation, and the right team, homeownership isn't just possible—it's achievable.
Your North Texas home is waiting. Armed with the knowledge in this guide and supported by experienced professionals who understand first-time buyers, you're ready to make it yours.
Welcome home to North Texas.
The Miranda Realty Team
Doing good business with good people, for the glory of God and the good of others
This guide was created in January 2026 and reflects current market conditions, loan programs, Texas regulations, and assistance programs as of that date. Real estate markets, interest rates, loan programs, and regulations change over time. Consult with real estate and lending professionals for the most current information specific to your situation.
