Chris  Schmidt
Chris Schmidt

The Ultimate Guide for First-Time Home Buyers in Texas

Buying your first home is an exciting milestone! But it can also feel overwhelming for first-time home buyers. This first-time home buyer guide breaks down everything you need to know as a new homeowner in Texas.

Key Takeaways:

  • A first-time home buyer is someone who has not owned a home in the past 3 years.
  • First-time buyers in Texas can qualify for down payments as low as 3%, with many programs available. 
  • Key benefits include the mortgage credit certificate, down payment assistance, and tax exemptions.
  • On a $100k home, a 3% down payment would be $3,000 and a 20% down payment $20,000.
  • While possible to buy with 0% down through some programs, 20% down is recommended but not required.
  • Getting pre-approved and having your finances in order are key to qualifying for the best first-time home buyer loans.

According to the Texas Association of Realtors, a first-time home buyer is someone who has not owned a homestead property in the past three years. This definition applies when looking into special programs and loans for first-time buyers in Texas.

How Much Do First-Time Home Buyers Have To Put Down in Texas?

The minimum down payment for first-time home buyers in Texas can be as low as 3%. This is much lower than the traditional 20% down payment often required for conventional loans. 

There are a few popular first-time home buyer programs in Texas that allow qualified buyers to put down between 3-5%:

FHA loans – Offer 3.5% down payments and are popular with first-time buyers. 

VA loans – Require 0% down for veterans and active-duty military.

USDA loans – Offer 0% down loans for rural properties.

While putting 20% down is not required, it is recommended if you can afford it. The more you put down, the lower your interest rate and monthly payments will be.

What Benefits Do First-Time Home Buyers Get in Texas?

There are some nice perks for first-time buyers in Texas:

  • Mortgage Credit Certificate (MCC) – Offers up to $2,000 in annual federal tax credits based on mortgage interest paid.
  • Down Payment Assistance Programs – These programs provide grants or loans to help cover your down payment and closing costs.
  • Homestead Exemptions – All Texas homeowners can claim homestead exemptions on their primary residence to reduce school district property taxes.
  • First-Time Home Buyer Tax Exemption – Reduces the taxable value of a first Texas homestead by $25,000.

Shopping around for loans and programs tailored to first-time buyers can take advantage of these savings. A real estate agent knowledgeable in new buyer programs can point you in the right direction.

How Much Is a Down Payment on a $100k House?

On a $100,000 home purchase, here are examples of down payments required at different levels:

– 3% down payment – $3,000

– 5% down payment – $5,000 

– 10% down payment – $10,000

– 15% down payment – $15,000

– 20% down payment – $20,000

So for example, putting the minimum 3% down on a $100k house would mean bringing $3,000 to closing. 

Saving up your down payment can take time. Start preparing your savings well in advance before you plan to buy.

Can You Buy a House in Texas With No Money Down?

While rare, it is possible for first-time buyers to purchase a Texas home with 0% down through special state and federal programs. These include:

  • USDA 0% Down Payment Loan – For low-income borrowers purchasing rural properties. 
  • VA 0% Down Payment for Veterans – For qualifying veterans and active-duty military.
  • HomeReady Mortgage – Requires as little as 3% down with flexible credit and income requirements.
  • Community Seconds Program – Offers 0% interest second loans to cover down payment gaps.

The catch is that strict eligibility rules apply, and 0% down programs are not available for all buyers. You will also pay higher monthly PMI and interest rates. 

But they make homeownership achievable if you have little saved for a down payment.

Do You Have to Put 20% Down on Your First House? 

While it’s ideal, putting 20% down on your first home is not required in Texas. Thanks to specialized first-time buyer programs, qualifying buyers can put as little as 3% down. This makes buying more affordable for young and first-time buyers starting out.

The main pros of putting 20% down are:

Avoiding private mortgage insurance (PMI)

Qualifying for better interest rates

Building instant equity on your home

Lowering monthly mortgage payments

However, today’s competitive market means buyers often have to jump on opportunities with less than 20% down. Being flexible and looking into low down payment mortgages can give first-timers an edge.

How to Qualify for a Home Loan as a First-Time Buyer in Texas

When applying for Texas home loans as a first-time buyer, there are a few key steps to qualify:

  • Have a good credit score – Lenders look for scores of at least 620, but aim higher for the best rates.
  • Lower your debt-to-income ratio – Keep total debts under 43% of gross monthly income.
  • Save for your down payment – Have funds for at least 3% down ready.
  • Get pre-approved – Having a pre-approval letter in hand gives you negotiating power.
  • Understand loan options – Know the different loan types and programs available to first-timers. An experienced loan officer can help navigate this.
  • Document your income – Have W-2s, pay stubs, and all income details ready. 

Arriving pre-approved and financially prepared will make the mortgage process smooth as a first-time buyer.

What Time of Year Is Best to Buy a Home?

The most active seasons to buy a home in Texas tend to be:

Spring – March through May when warmer weather brings buyers out house hunting. Great time to shop for a home and be settled for summer. 

Fall – September through November before the holidays when inventory is healthy. Prices may dip slightly before winter.

During spring and fall, you’ll have the most selection and least competition from other buyers in most markets. The summer and winter months tend to have lower inventory and less ideal weather for home shopping.

No matter when you buy, working with a savvy real estate agent is key to tracking down available homes and making competitive bids in any season.

What Is the Average Age of First-Time Home Buyers?

According to the National Association of Realtors, the average first-time home buyer today is 33 years old. 

While in their early 30s is most common, first-time buyers span across generations:

  • Millennials age 24-39 make up the largest share of new buyers.
  • Younger Generation Z buyers age 18-23 account for 6%. 
  • Older Gen Xers age 40-55 are also active first-timers.

There is no set age limit when it comes to buying your first home. Financial readiness, credit health, and stability are more important factors than age when qualifying for a mortgage pre-approval.

With the right savings, income, and credit profile, you could become a homeowner as a young professional or later in life. Partnering with a lender and realtor suited to new buyers can help demystify the process at any age.

Buying your first home is a big step at any stage of life. Hopefully this guide gives you key insights into successfully navigating the process as a first-timer in Texas! Reach out to trusted professionals and they can help make your dream of homeownership a reality.

What Realtor Can Help First-Time Home Buyers in Texas?

If you’re looking for the top realtor in Houston, Texas, look no further than Chris Schmidt and Your Home Sold Guaranteed Realty - Chris Schmidt Team. We’re experts in the Houston housing market. With years of experience helping all home buyers, including first-time home buyers, we know all the historical market patterns and current trends in the area. 

Plus, our unique buyer guarantees like the Buy it Back Guarantee and Move Up Guarantee make purchasing a home risk-free. Our team offers these guarantees because we believe you should have a stress-free home-buying experience. 

Above all, we’re committed to providing high-quality customer service, exceptional communication, and expert negotiation skills. To learn more about working with the real estate agents at Your Home Sold Guaranteed Realty - Chris Schmidt Team to buy a house in Houston, call 713-322-5604, send a message to [javascript protected email address], or fill out the form on this page.

To Discuss Your Home Sale or Purchase, Call or Text Today and Start Packing!