First-Time Home Buyer Agent

FHA loans allow as little as 3.5% down, conventional loans start at 3%, and VA loans for veterans require zero down. On top of that, Houston has some of the most generous assistance programs in the country. The City of Houston Homebuyer Assistance Program offers up to $50,000 in a no-interest forgivable loan for income-qualifying buyers. TSAHC offers grants that never need to be repaid. Harris County buyers outside city limits can access up to $23,800 through the Harris County DAP. Most first-time buyers in Houston close with far less out of pocket than they expected.

Pre-approval is what you need. Pre-qualification is a quick estimate based on unverified information. Pre-approval means a lender has pulled your credit, reviewed your actual documents, and issued a written commitment for a specific loan amount. Sellers in Houston require it. Without one, your offer will not be taken seriously. To get pre-approved, gather your last two months of pay stubs, two years of tax returns, two months of bank statements, and a government-issued ID. The process takes a few days. Get it done before you tour a single home.

Most loan programs require a minimum score of 620. FHA loans can go lower, with some lenders approving scores as low as 580 with 3.5% down. VA loans have no official VA minimum. The City of Houston Homebuyer Assistance Program requires no minimum credit score at all. That said, your score directly affects your interest rate, which affects your payment for the life of the loan. If your score needs work, spend a few months paying down balances and disputing any errors before applying. Credit improvement typically takes three to six months and the savings on a better rate add up significantly over 30 years.

Budget 2% to 5% of the purchase price. On a $320,000 home, that is roughly $6,400 to $16,000. Closing costs cover lender fees, title insurance, appraisal, survey, prepaid homeowner's insurance, and escrow reserves for property taxes. Texas charges no documentary stamp or intangible tax on mortgages, which keeps costs lower than in many other states. Flood certification is also standard at closing in Houston. In today's market, many sellers are covering buyer closing costs as a negotiated concession. Down payment assistance programs through the City of Houston and TSAHC can also be applied toward closing costs, reducing what you bring to the table.

As of August 2024, how buyer's agents are compensated changed as part of the National Association of Realtors settlement. Buyer agent compensation is no longer advertised on the MLS. Instead, compensation is negotiated and clearly outlined in a written Buyer Representation Agreement, which you will sign before we begin working together.

In practice, compensation can be covered in a few ways: the seller may offer a concession to cover it, the buyer may pay it directly, or it can be negotiated as part of the overall transaction. What matters most is that you understand exactly what you are agreeing to before we take a single step. I walk every client through this clearly during our initial consultation. Broker commissions are not set by law and are fully negotiable.

Standard homeowner's insurance does not cover flood damage. In Houston, flood insurance is essential regardless of whether your home is in an official flood zone. Flooding in the Houston metro has affected neighborhoods across the city that carry no official designation on FEMA maps. If your home is in a FEMA-designated Special Flood Hazard Area, your lender will require flood insurance as a loan condition. Even outside those zones, a separate policy is strongly recommended. Coverage through the National Flood Insurance Program typically runs $700 to $900 per year for most Houston homes, though cost varies by elevation and flood zone status. Every home considered should have its flood history and FEMA map designation reviewed before making an offer.

Higher than the national average, and critical to factor into your budget from day one. Harris County's average effective property tax rate is around 2.13%. On a $320,000 home, that adds roughly $570 per month to your payment through escrow, on top of your mortgage. Many first-time buyers calculate only the mortgage and are caught off guard at closing. Texas has no state income tax, so property taxes fund local schools and services. As a homeowner, you can file a homestead exemption with the Harris County Appraisal District by April 30 of your first year of ownership, which lowers your taxable value. You can also protest your assessed value each year if it seems inaccurate.

Plan for 60 to 90 days from your first consultation to closing. Pre-approval takes a few days to a week. The home search varies, typically two weeks to two months depending on your criteria and how quickly you make decisions. Once your offer is accepted, closing takes 30 to 45 days to cover inspection, appraisal, title, and final loan approval. If you are using the City of Houston down payment assistance program, add time. Their review process takes about six weeks from a complete application, and they recommend not going under contract until you have your pre-approval letter in hand. Getting your financial documents organized early is the single most effective way to keep the timeline moving.