Buying a home in Texas for the first time? the mortgage process for first-time home buyers in Texas involves steps like checking your credit score, budgeting with the 28/36 rule, and saving for a down payment. Pre-approval is crucial before house hunting. Understanding loan options like FHA or VA loans and preparing necessary documents ensures a smoother home-buying experience.
Step 1: Check Your Credit Score
Your credit score matters—a lot. It’s one of the biggest factors lenders look at when deciding whether to approve your mortgage. A higher score means better interest rates and more loan options.
Here’s what to do:
- Check your score for free on sites like NerdWallet or Credit Karma.
- If it’s below 620, work on improving it (pay off debt, avoid new credit cards, and pay bills on time).
- Aim for 700+ if you want better loan terms.
Step 2: Decide on Your Budget
How much house can you afford? That’s the real question. The mortgage process for first-time home buyers isn’t just about getting approved—it’s about making sure you don’t end up house-poor.
Follow the 28/36 rule:
- 28% of your gross income should go toward housing costs.
- 36% should cover all debt, including car payments and credit cards.
Let’s say you make $5,000 a month. That means:
- Housing expenses (mortgage, taxes, insurance) shouldn’t be more than $1,400.
- Total monthly debt shouldn’t be more than $1,800.
Not sure how much your home will cost monthly? Use a mortgage calculator to check.
Step 3: Save for a Down Payment
The myth? You need 20% down. Reality? You can buy a house with as little as 3-5% down.
Options for first-time buyers:
- FHA loans: 3.5% down, easier approval.
- Conventional loans: 3-5% down if you qualify.
- VA loans: 0% down if you’re a veteran.
- USDA loans: 0% down in rural areas.
If your home costs $300K, this means:
- 3% down = $9,000
- 5% down = $15,000
- 20% down = $60,000
Have less than 20%? You’ll probably need private mortgage insurance (PMI), which adds a little to your monthly payment.
Step 4: Get Pre-Approved
Before you look at homes, get pre-approved. This shows sellers you’re serious and helps you know exactly what you can afford.
What you’ll need:
- Proof of income (W-2s, pay stubs, or tax returns).
- Bank statements.
- Credit score check.
- Debt-to-income ratio details.
Want an edge? Work with a lender that understands first-time buyers. Check out more home-buying tips on our blog.
Step 5: House Hunting
Now the fun part. But don’t just see homes—go in with a plan.
- Stick to your budget. Mortgage lenders might approve you for more, but that doesn’t mean you should max out.
- Think long-term. Does this home make sense five to ten years from now?
- Check out the neighborhood. Crime rates, schools, and amenities matter.
Once you find the one, it’s time to make an offer.
FAQs
How long does the mortgage process take?
From pre-approval to closing, it usually takes 30-45 days.
Can I buy a house in Texas with bad credit?
Yes, but you may have higher interest rates. FHA loans are a good option if your score is low.
What’s the difference between pre-qualification and pre-approval?
Pre-qualification is an estimate. Pre-approval is verified, meaning sellers take it more seriously.
Conclusion
The mortgage process for first-time home buyers can feel huge, but when you break it into small steps, it’s totally doable.