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A Guide for First-Time Texas Home Buyers

If you’re looking to put down roots, the Lone Star State offers a unique blend of cultural diversity, economic prosperity, and vast landscapes, making it an appealing destination for many. Our thriving job market, more affordable cost of living, and quality of life are just a few reasons why people are drawn to Texas.

For first-time home buyers, Texas not only presents an opportunity to plant roots in a thriving state but also offers a variety of programs and loans designed to make homeownership more accessible. This guide is tailored to help you navigate the journey of buying your first home in Texas.

First-Time Home Buyers Buy New Construction Homes

Although first-time home buyers are younger than repeat buyers, they have been getting older. In 2023, the median age was 35 years old nationwide per the National Association of Realtors.

A common misconception is that first-time home buyers buy fixer upper homes and can’t afford new construction. At Hillwood Communities, there are a decent percentage of first-time home buyers per our 2023 sales data, charted below.

Financial Considerations for First-Time Home Buyers in Texas


Experts recommend spending no more than 28% of your gross monthly income on housing. To calculate how much house you can afford, factor in additional costs such as property taxes, homeowners insurance, mortgage insurance, and maintenance. This holistic view will help ensure you’re financially comfortable with homeownership.

Credit Score

Your credit score significantly impacts your mortgage terms. A higher score can help you obtain lower interest rates, making your home more affordable. It’s advisable to check your credit score early in the process so you can address any issues.

Housing Assistance Programs

These programs are designed to lower the initial costs of buying a home, allowing buyers to preserve savings for other expenses. Eligibility typically depends on your income, credit score, and home purchase price, with most programs requiring buyers to be first-time homeowners and complete a homebuyer education course.

For Texans looking to buy their first home, these down payment assistance programs can significantly ease the financial burden, making the dream of homeownership more attainable.

Financing Your Home

Types of Mortgages

Navigating the world of mortgages can seem daunting for first-time home buyers. Understanding the different types of available loans can help you make a choice that aligns with your financial situation and homeownership goals.

Existing Homes vs. New Construction

Finding the Right Home

Deciding between an existing home and a new construction home is a pivotal step in the homebuying journey. Each option offers distinct advantages.

Existing homes are set in established neighborhoods, offering historical charm and mature landscapes. However, they often require renovations or cosmetic updates and potential homeowners should be prepared for the maintenance challenges that come with older homes. Additionally, existing homes often come with higher per-square-foot costs due to their location and limited inventory.

On the other hand, new construction homes, particularly those in new home communities, present a modern living experience tailored to today’s homeowners. These homes are built in up-and-coming areas likely to appreciate in value, and are designed with the future in mind, including their proximity to quality schools and green spaces.

Buyers typically have the ability to customize their homes, selecting interior and exterior finishes and optional upgrades. These communities are chock full of amenities like luxurious pools, fitness facilities, outdoor living areas, trails, event venues, fishing ponds, playgrounds, on-site schools, and much more. Typically they are completed in phases, just like the homes within the community, so some amenities will be ready for use right away while others will be completed as the community expands.

Ultimately, the choice between an existing home and a new construction home depends on personal preferences, whether it’s the allure of a home with history or the appeal of a modern house in a vibrant community with resort-style amenities.

Frequently Asked Questions

While putting 20% down is the traditional rule of thumb, many first-time buyers put down less. There are several first-time home buyer programs that offer down payment assistance for eligible Texas buyers, reducing the upfront financial burden. These programs, provided by state and local housing authorities, offer loans, grants, and other financial assistance to make homeownership more accessible to first-time Texas home buyers.

Obtaining pre-approval from a lender is a critical step. It not only clarifies your budget but also strengthens your offer on a home. When purchasing a new construction home, explore financing options through the builder’s lending partners, as many offer special financing deals that can deliver substantial savings.

While by no means mandatory, enlisting the help of a real estate agent when buying a home offers several key benefits:

Expertise: Agents possess deep knowledge of the housing market, including insights into various neighborhoods and the latest trends, helping you make informed decisions.

Resources: They provide access to a broader range of listings, some not publicly available, and have a network of professional contacts that can be invaluable during the buying process.

Access: By virtue of their credentials and reputation, a licensed real estate agent has access to the multiple listing service (MLS) which provides a simplified communication system to request access to an existing home.

Time-Saving: Agents take on the heavy lifting of property searches and coordination, freeing up your time.

Negotiation: With their negotiation prowess, agents can help you at the negotiating table, addressing price, terms, and conditions effectively.

Support: Beyond the logistics, agents offer emotional support, guiding you through the highs and lows of the homebuying journey.

You do not need to work with a real estate agent to buy a new construction home. You can buy a home working directly from the builder’s representative who will be on site at the builder’s model home. The rep can show you floor plans and available building sites, and answer all your questions. However, some buyers at new home communities choose to work with a real estate agent for their invaluable guidance and negotiating assistance. Just be sure to let the builder’s representative know you are working with an agent early on in the process.

The purchase process includes making an offer and price negotiations. On an existing home, you may find that there is little room to negotiate, particularly when inventory is extremely limited as it has been in recent years. New construction homes tend to offer more pricing flexibility in the form of builders’ incentives including free upgrades, interest rate buydowns, and cash towards closing.

After your offer is accepted, you will make an earnest money deposit, typically 1-3% of the purchase price. Next steps include a home inspection and appraisal, securing homeowner’s insurance, and a final walkthrough to ensure the property’s condition.

Closing the Deal

Closing costs are an additional expense, but some builders in new home communities offer cash incentives that can offset these costs. The final walkthrough is your last chance to address any concerns before the property becomes yours.

First-Time Home Buyers in Texas: The Hillwood Difference

For first-time buyers in Texas, the path to homeownership is filled with exciting opportunities, especially within new home communities. Hillwood’s lifestyle communities offer energy efficient homes, modern amenities, and a full schedule of unique monthly programming that enables a culture of belonging, making them an ideal choice for those looking to make Texas their home for good.

For more information, contact us to explore the possibilities that await in one of Hillwood’s vibrant communities, where your Texas homeownership dream can become a reality.

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