From First-Time Home Buyer to First-Time Homeowner

Buying your first home is one of the most exciting experiences in your life and is also an invaluable education that you’ll carry with you forever. Because Texas –and especially the Austin area –is one of the top housing markets in the country, competition is fierce. But that doesn’t mean you can’t find the right home for you in your price range. With our 30+ years of experience in the Austin market, we know you’ll need to keep an open mind and rely on experienced real estate professionals to help you navigate the market and process. Here’s what we recommend you need to know if you are looking to buy your first home:

Determine how much house can you afford.

The amount of money you need to buy a home depends on your own financial situation. That includes how much house you can afford, your credit score, the amount of your down payment and the types of mortgage assistance programs for which you qualify. The higher your credit score, the easier it is to qualify for the best mortgage rates.  If your credit score is lower, there are other options, and you can increase your down payment to balance it out. You can investigate the Federal Housing Administration (FHA) program which only requires a down payment of 3.5%. If you’re eligible for USDA or VA loans, you don’t need to make a down payment.

Our number one tip for someone looking to buy their first home is to research programs available for making the down payment as affordable as possible. Look at your finances and talk to your financial institution about interest rates. Don’t forget to search specific programs in Texas for first time home buyers. You could qualify for programs that assist with down payments, closing costs and taxes. Texas Department of Housing and Community Affairs offers The Texas Homebuyer Program with several products to assist you. 

Gather these items so you’ll be ready to meet with your financial institution:

• Driver’s License
• Social Security Card or ITIN
• 3 Months of Bank Statements (all pages)
• 2 Months of Pay Stubs
• 2 Years of the Most Recent Tax Returns or Tax Transcripts (need 3 years if using the My First Texas Home and or Texas MCC options)
• 2 Years of W2s or 1099s. If Self Employed – recent Profit and Loss Statement.

Get preapproved for a mortgage.

Once you’ve determined what you can afford, get preapproved for a mortgage. This simplifies the buying process and makes it easier for you to act fast when you find a home you want to make an offer on. With a limited inventory of homes, you’ll need this to compete in a hot market like we have here in the Austin area.

Pick the right real estate agent.

You want someone who is an expert in the area where you are looking to buy. “Experienced” is good but “experienced where you want to buy” is critical. Check references and interview several real estate professionals to ensure you have the right agent working for you.

Begin the search.

Start looking online to get a feel for what’s available within your budget. Many homes have video tours that give you a wealth of information on the home from the comfort of your desk or couch. As you start looking at homes, your agent can help you with details on the neighborhood, schools, amenities, as well as specific things to consider about the home. How old is the roof? Any issues with the foundation? What can you expect from the HOA guidelines and restrictions? Your agent will help you each step of the way.

Make an offer.

Once you’ve found a home you want to purchase, your agent will help you with a written offer that covers the important details such as the amount you’re offering and any contingencies.

Secure a property inspection and appraisal.

You’ll want an independent third-party inspector to assess the home. Even the most perfect looking homes can have hidden issues. Finding these ahead of time and being able to negotiate the price for repairs will save you time, headaches and money down the road.

Finalize your deal. 

Texas is what’s known as an “escrow state,” which means that you’ll need to put down some money even before the deal officially closes. An escrow account keeps the money and documents safe with a third party as you finish your transaction.

Be prepared for closing.

Besides signing your name and initials repeatedly at closing, you’ll want to make sure you have purchased homeowners’ insurance. Read and acknowledge your closing disclosure which is a summary of the final costs of your loan. Attend a final walk through of the home to make sure it is in the condition that was outlined in your purchase agreement. This is when you ensure all repairs were completed and that the property wasn’t damaged when the owner moved out. Insider Tip: If you want all appliances to be included in the sale, be sure you have the correct addendum signed prior.

Bring the following items to your closing:

• Photo identification in the form of a driver’s license, passport or government-issued ID
• A cashier’s check to cover the final closing costs, explained in your Closing Disclosure
• A copy of your homeowners insurance policy 

Make the move.

We recommend setting aside budget for movers based upon your individual needs. This will decrease the stress of the physical move and allow you to enjoy the excitement of your status as homeowner. Your title change from first-time home buyer to first-time HOMEOWNER awaits!