A Texas Made Mortgage Resource
Buying Your First Home
Nobody is born knowing how a mortgage works. This walks through the whole thing in order — what happens at each stage, who is responsible for it, and where first-time buyers get stuck. It is written for buying in Texas, where a few things — the option period, your homestead exemption, how property taxes land in your payment — work differently than what you will read online.
Free to read. Nothing to sign up for.
First things first
Pre-qualified vs. pre-approved
Pre-qualified
A conversation. We look at your income, your debts, and your savings, and tell you roughly where you stand. Nothing is verified yet. It is a useful estimate, and a good place to start when you are still months out.
Pre-approved
A reviewed file. You have applied, we have verified your documents and your credit, and we have issued a letter you can shop with. Sellers and their agents can tell the difference between the two.
Neither one is a loan approval
The home still has to appraise. Title still has to come back clear. And underwriting still has the final say. A pre-approval letter tells a seller you are serious and prepared — it is not the last word on the loan.
Still months out?
What to Do Six to Twelve Months Before You Buy
- Pay every account on time — payment history moves a credit score more than anything else, and it takes months, not weeks.
- Don’t pay off old collections without asking us first. Done at the wrong time, it can lower your score right before you need it.
- Keep your down payment money in one account and let it sit — money that’s been there two statements or more doesn’t need explaining.
- Hold off on new credit cards, car loans, and co-signing for anyone.
- Planning a job change? Tell us — timing it right can save the file.
- Start the conversation now. A soft credit pull today tells you exactly what to work on, and it doesn’t touch your score.
The process, in order
Seven stages, start to keys
Open any stage to see what happens, what you do, and where people get stuck. The tag tells you whose turn it is.
What happens
The real first step isn't shopping or saving — it's letting us look at actual numbers instead of estimates. You start an application and we build a picture of what you can do. Depending on your timeline we can begin with a soft credit pull, which doesn't affect your score. If you're getting close to making offers, we'll need a hard pull, because a real pre-approval requires one.
What you do
Start the application and answer the questions honestly. Then think about what you want a monthly payment to feel like — not the maximum you could be approved for, the number you'd still be comfortable with in a slow month.
Where people get stuck
Guessing, and then quitting on the guess. Plenty of buyers decide they won't qualify and never ask. The 740-credit-score requirement you read about online is a myth — programs commonly allow scores in the low 600s, and some go lower. Finding out costs nothing, and early on it doesn't have to touch your credit at all.
What happens
We verify income, assets, and credit — this stage requires a hard credit pull — review the file, and issue a pre-approval letter you can shop with. If you intend to make offers, this is not optional. Sellers won't take an offer seriously without it.
What you do
Send documents and answer follow-ups. When we ask about a deposit from four months ago, it isn't suspicion — the file has to show where money came from, and we ask everybody.
Where people get stuck
Sending part of a document. Bank statements need every page, including the blank last one.
What happens
The good part. You shop inside a number you already trust.
What you do
Check in with us as you narrow it down. Property taxes and insurance vary enough between neighborhoods and school districts that two homes listed at the same price can carry noticeably different monthly costs. Our mortgage payment calculator is built for exactly this — run the numbers on an address before you fall for it.
Where people get stuck
Falling for a home before looking at what it costs to hold.
What happens
Your real estate agent writes the offer. If the seller signs, you have an executed contract, and every other deadline starts counting from that date. Your agent sends the executed contract over to us so we can get to work.
What you do
Deliver your option fee and earnest money on time, exactly as the contract specifies. Lean on your agent — this is the stage where they earn their keep.
Where people get stuck
This is where a good agent makes an enormous difference. An experienced one delivers the contract to us the day it's signed, tracks every deadline, and keeps all sides talking. If you don't have an agent yet, ask us — we work with people who are genuinely good at this, and the right one makes the whole process smoother.
What happens
Texas contracts commonly include a negotiated window during which you can terminate for any reason at all, in exchange for a fee paid to the seller for that right. It exists so you can inspect the home and change your mind.
What you do
Order an inspection immediately — not midway through. Read the whole report. Then decide whether to request repairs, renegotiate, or walk.
Where people get stuck
Treating it as a formality. This is the widest exit you'll have in the entire transaction, and it closes on a specific day at a specific time.
What happens
An appraiser gives an opinion of value. A title company researches ownership history and issues title insurance. A survey may confirm boundaries. Underwriting reviews all of it against the loan program's requirements.
What you do
Keep your financial life boring and answer fast. Don't change jobs, open new credit, or move large sums between accounts without telling us first.
Where people get stuck
Silence. A request sitting unopened in your inbox for three days moves your closing date by three days.
What happens
You receive final figures ahead of signing. You do a final walkthrough, sign at the title company, funds are wired, documents are recorded, and the home is yours.
What you do
Bring a government-issued photo ID. Read your closing figures when they arrive, not at the table. And before you wire anything, call the title company at a number you looked up yourself and confirm the instructions out loud.
Where people get stuck
Wire fraud. Criminals target buyers at exactly this moment with emails that look correct and contain altered account numbers. Nobody will ever legitimately email you last-minute changes to wire instructions. Verify by phone, every time.
Timelines
How long does all this take?
A typical purchase runs about three to four weeks from executed contract to keys, and the biggest variable is how fast documents come back. With a complete file and same-day answers, we can close in as little as 10 days. Getting your file reviewed before you shop is what makes that kind of speed possible. You can also estimate a full monthly payment — taxes and insurance included — before you talk to anyone.
After the keys
The First Year After Closing
Your first payment isn’t next month
Mortgage interest is paid in arrears, so your first payment usually lands on the first of the second month after closing. Your closing disclosure shows the exact date.
Your loan may be transferred
It is common for a loan’s servicing to move to another company. You’ll get letters from both sides — it’s normal, not a scam, and your terms don’t change. Just verify any new payment instructions before acting on them.
The escrow analysis
Once a year your servicer compares the escrow account against the real tax bill and insurance premium. That’s when the payment can move — especially in year two, once your exemption and a reassessment land.
File the homestead exemption
If you haven’t yet, do it now — it’s free, and it’s the thing buyers most often forget by the time it matters.
Local rules matter
What’s specific to buying in Texas
Financing works broadly the same way everywhere. Owning a home in Texas does not. These apply statewide, from the Panhandle to the coast.
The option period
A negotiated right to walk away from the contract for any reason at all, bought with a fee you deliver to the title company within three days of the contract being signed. Most states have nothing quite like it, and it is the strongest protection a Texas buyer has. It closes on a specific day at a specific time.
You’ll sign an agreement with your agent
Before an agent shows you homes, you’ll sign a written agreement that spells out what they do for you and how they get paid — standard now, and negotiable. How it gets paid varies: it can be requested from the seller as part of your offer, covered by you at closing, or split. It is a real line in your cash to close, so bring it to us early and we’ll show you how each version changes what you need at the table. Don’t assume the seller automatically covers it because that’s how it used to work — ask what the agreement says before you sign.
You file your own homestead exemption
The seller’s exemption does not transfer to you. After closing, you apply directly with your county appraisal district. It is free and it is one form — and you may not have to wait until next year: if the seller did not already have a homestead exemption on the property for the current tax year, you can file as soon as you close and receive a prorated exemption for the rest of the year. If they did, you file after January 1. Keep the paperwork, though: appraisal districts are now required to re-verify homestead exemptions periodically, so you may get a letter years later asking you to confirm you still live there. Answer that one. What you can throw away is the official-looking mail from private companies offering to file it for a fee — the county never charges for it.
No state income tax, but property taxes carry weight
Texas funds schools, cities, counties, and hospital districts largely through property tax, and every one of those entities sets its own rate. That makes the tax portion a real part of your monthly payment rather than a footnote — and it is why two homes at the same price in two districts can cost differently to own. Once your homestead exemption is on file, the first $140,000 of your home’s value is exempt from school district taxes — the largest single piece of most Texas tax bills, and a big part of why your year-two payment can look different from year one.
Your payment can change after the first year
First-year escrow is built on the best tax estimate available at closing, which may not yet reflect your own exemption or a reassessed value. When the escrow account is reviewed, the tax portion can move. This surprises people who were never told to expect it.
Insurance deserves an early phone call
Much of the state sees hail and high wind, and along the coast windstorm coverage is often written separately from the main policy. Get a quote while you are still in your option period, not after. In a small number of areas coverage is harder to place than buyers expect, and that is better to learn early.
You close at a title company
Texas closings are handled by title companies rather than attorneys, and title insurance premiums are set at the state level — so shopping around does not change that premium, though other fees do vary. Your title company is also who you verify wire instructions with, by phone, at a number you looked up yourself.
Ask about these
Other Texas particulars
None of these are problems. They are the things Texas buyers most often find out about late, when there was an easy answer available early.
Texas is a community property state
Your spouse may need to sign certain documents at closing even if they are not on the loan and not on the application. It is routine. It is also worth knowing before you get to the table.
An existing survey may work
If the seller has a prior survey, it can sometimes be reused along with a signed affidavit rather than paying for a new one. Ask your agent and the title company early, because it depends on what has changed at the property.
MUD and PID districts
Newer developments are frequently inside a municipal utility or public improvement district that adds its own assessment to the tax bill. It is disclosed, but it is easy to skim past. Ask what the full tax rate on a specific address is before you fall for the house.
Buying new construction
Builder incentives are usually tied to their preferred lender — understand what the incentive is actually worth, and know you can still compare. Build timelines mean a longer rate lock, which works differently than a 30-day one. And watch the escrow trap: a brand-new home’s first tax bill is often estimated on the empty lot, because the house didn’t exist on January 1 — the full assessed value lands in year two. Most new communities also sit in a MUD or PID.
HOA resale certificate
If the home is in an association, you are entitled to documents describing the dues, the rules, and the association’s finances. Read them during your option period — restrictions on parking, fences, rentals, and exterior changes live in there.
Rural and acreage properties
Outside city limits you may be dealing with a septic system, a well, propane, or a shared road. Some land also carries an agricultural valuation that can trigger back taxes if the use changes. These are all workable, they just need to be identified early because they can affect the loan.
Homestead protections and equity rules
Texas has unusually strong homestead protections and its own constitutional limits on borrowing against home equity. It rarely affects a first purchase, but it is part of why some things work differently here than what you may read online.
Vocabulary
Five money words people mix up
Option fee
Delivered to the title company for the right to terminate during the option period, and credited to the sales price when you close. Not returned if you walk. The three-day delivery deadline is real — miss it and you can lose the option.
Earnest money
Deposited with the title company as a show of good faith. Applied toward what you owe at closing. It can be at risk if you break the contract outside its protections.
Down payment
Your share of the purchase price, paid at closing. It varies a great deal by loan program, and it is frequently less than first-time buyers assume. Gift funds from family are allowed on all the major programs — they need a gift letter and a paper trail showing the transfer.
Closing costs
The fees to originate the loan and transfer the property: title work, appraisal, recording, prepaid taxes and insurance. Separate from and in addition to the down payment.
Escrow
The portion of your monthly payment set aside so property taxes and insurance get paid when they come due. Reviewed periodically, which is why the payment can adjust.
Run your own figures
Estimate a monthly payment
Switch between the three programs and change any number. Nothing you type is sent anywhere, and nothing here is a quote.
The rate field starts empty on purpose. A rate depends on your credit, your loan, and the day — ask us and we’ll tell you where you actually stand.
Taxes and insurance are the part most first-time buyers underestimate, and in Texas they move a lot by county and district. Replace these with real figures for the address you are looking at.
Enter a rate
This calculator produces an illustration based only on the figures you enter. It is not a quote, a rate offer, a commitment to lend, or an offer of credit, and it is not legal, tax, or financial advice. Actual payments depend on your credit, program eligibility, property, and current terms, and all loans are subject to credit approval, underwriting, and property qualification. Tax and insurance amounts are estimates until the actual assessment and policy are issued.
What we’ll ask you for
- Recent pay stubs
- W-2s or 1099s for the most recent two years
- Two years of tax returns if you are self-employed, commissioned, or a business owner
- Bank and asset statements, with all pages included
- A gift letter and a paper trail showing the transfer, if family is helping with your down payment
- Government-issued photo ID
- Certificate of Eligibility for VA loans
- Documentation for any assistance program you're using — see first-time buyer programs
Follow-up requests are routine. They mean the file is moving, not that something is wrong.
Don’t do these while under contract
- Open new credit or finance a car
- Change jobs, or move from salary to self-employment
- Make a large deposit you can't document
- Co-sign for anyone
- Close a long-standing credit account
- Pay off collections without asking us first
Credit and the file get re-checked before closing. A change made after pre-approval can still undo it.
Choosing a path
Three loan programs to know
Conventional
The most common kind of home loan, not backed by a government agency. It tends to suit buyers with steady documented income and reasonably well-kept credit. Mortgage insurance may be required at first, and it can come off later once you have built enough equity.
FHA
Insured by the Federal Housing Administration, and designed to widen the door. Guidelines on credit history and down payment are generally more forgiving, which makes it a common fit for first-time buyers or anyone whose credit is still recovering. It carries its own mortgage insurance.
VA
For eligible veterans, active-duty service members, and certain surviving spouses. It is usually the strongest option available to anyone who qualifies: no required down payment in most cases and no monthly mortgage insurance. You will need a Certificate of Eligibility.
2026 loan limits
Conventional: $832,750 for a one-unit home — the same in every Texas county. FHA: $563,500 in Collin, Dallas, Denton, and Tarrant counties; $541,287 in standard-cost Texas counties. VA: no limit for eligible buyers with full entitlement. Limits reset each January.
Help with the upfront costs
Down Payment Assistance in Texas
These programs are not advertised much, and they change what “I need to save longer” actually means. You may qualify for one right now — ask us to check before you assume otherwise.
TSAHC — Homes for Texas Heroes
For teachers, police, firefighters, EMS, corrections officers, veterans and active military, and nursing faculty. Assistance comes as a grant or a forgivable second lien. Does not require you to be a first-time buyer.
TSAHC — Home Sweet Texas
The same structure, based on income rather than occupation.
TDHCA — My First Texas Home & My Choice Texas Home
The state’s own programs, offering down payment and closing cost assistance.
Mortgage Credit Certificate
A federal tax credit on part of your mortgage interest, every year you own the home. First-time buyers can often pair it with the assistance above.
City & county programs
Dallas, Plano, and several others run their own, with their own boundaries and income limits.
You may qualify for one of these — eligibility, income limits, and funding change through the year, and program funds run out and reopen. This is general information, not a commitment to lend or a guarantee of program availability. Ask us to check what’s open for your situation.
The levers on your rate
Buydowns and Seller Concessions
Your rate isn’t only a market number. Points paid upfront can lower it for the life of the loan. A temporary buydown can lower your payment for the first year or two while you settle in, then step up to the note rate. And in many transactions the seller or builder — not you — pays for it as a negotiated concession.
Each program caps how much a seller can contribute, and whether a buydown is worth it depends on how long you’ll keep the loan. That’s a conversation, not a calculator. Ask us to run both versions side by side before you write the offer — the concession has to be in the contract.
Reference
Glossary
The schedule by which your loan is paid off over time. Early payments go mostly toward interest and later ones mostly toward the balance, even though the payment itself stays the same.
A measure of the cost of borrowing that includes both the interest rate and certain lender fees, expressed as a yearly figure. It exists so two offers can be compared on more than the rate alone.
An independent opinion of the home's market value, ordered by the lender and performed by a licensed appraiser. The loan is based on that value, not only on the price you agreed to pay.
The difference when a home appraises below the agreed price. The loan is based on the appraised value, so the gap gets renegotiated, covered in cash, or resolved through the contract’s protections.
Money paid upfront to lower the interest rate — permanently (points) or temporarily for the first year or two. Often paid by the seller or builder as a negotiated concession.
The underwriter’s final sign-off: every condition is met and closing can be scheduled. The last approval before signing day.
The final itemized statement of your loan terms and closing costs, delivered before you sign so you can review the real figures ahead of the table.
A comparison of what you owe each month to what you earn each month. Lenders use it to judge how much new payment a budget can absorb.
Two related meanings. During the transaction, a neutral third party holds funds and documents. After closing, it is the account your lender uses to collect and pay your taxes and insurance.
A reduction in the taxable value of your primary residence, filed with your county appraisal district. It does not transfer from the previous owner — you apply for it yourself after closing.
A standardized summary of your expected rate, payment, and closing costs, provided shortly after you apply. Its format is the same at every lender so offers can be compared side by side.
The loan amount as a percentage of the home’s value — an $80,000 loan on a $100,000 home is 80% LTV. It drives mortgage insurance requirements and pricing.
A federal tax credit for part of the mortgage interest you pay, claimed every year you own the home. Available through Texas housing agencies to eligible buyers.
Coverage that protects the lender if a loan is not repaid. It is commonly required when the down payment is small, and depending on the program it may come off later or stay for the life of the loan.
Shorthand for the four parts of a typical mortgage payment: principal, interest, taxes, and insurance. When people compare a mortgage to rent, this is the number that matters.
An optional upfront charge paid to the lender in exchange for a lower interest rate. Whether it pays off depends on how long you keep the loan.
An agreement that holds your quoted interest rate for a set period while your loan is processed, so market movement during that window does not change your terms.
Money the seller agrees to put toward your costs — closing costs, points, or a buydown — negotiated in the contract. Every loan program caps how much a seller can contribute.
A drawing of the property that shows boundaries, improvements, and easements. It answers where the lot actually ends and what may sit across it.
Protection against problems in the ownership history of the property — an unpaid lien, a missed heir, a recording error — that surface after you buy.
The lender's review of your file against the loan program's requirements. The underwriter is the person who decides whether the loan can be approved and on what conditions.
Questions are free
You don’t have to be ready to buy to ask what buying would look like. Most of the useful conversations we have are with people who are still months out — figuring out what to save, what to fix, and what order to do it in. Ask early. It costs nothing and it changes what your options are later.
This guide is general educational information about the home financing process and is not a commitment to lend, an offer of credit, or legal, tax, or financial advice. All loans are subject to credit approval, underwriting, and property qualification. Program terms and availability are subject to change. Property tax rules and exemption deadlines are set by the State of Texas and administered by county appraisal districts — confirm current requirements with your appraisal district.
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