Buying a first home is a series of decisions made in the right order. In the Valley, flood maps, district assessments, coastal wind coverage and Texas contract protections can move the math more than the list price.
Step 1: Know your real budget
Lenders approve you on income, debts, credit and down payment, but approved and comfortable are different numbers. Work backward from a payment you could carry in a lean month, with room left for repairs and furnishing.
Texas has no state income tax, but property taxes fill much of that gap. Rates combine county, city, school district and special districts, so two homes at the same price in Hidalgo or Cameron County can carry very different bills. Get the rate for the specific address, never a county average.
Test it with the affordability, mortgage and rent vs. buy calculators.
Step 2: Choose a loan and look at assistance
Common loan types
- Conventional. Low down payment options for qualified first-time buyers. Private mortgage insurance applies below 20 percent down and can be removed later.
- FHA. Federally insured, with flexible credit guidelines, a low minimum down payment and mortgage insurance premiums.
- VA. For eligible veterans, service members and some surviving spouses, often with no down payment. See my VA home loan guide.
- USDA. For eligible properties in USDA-designated rural areas, with household income limits. Some addresses at the edges of Valley cities may qualify; check the USDA eligibility map.
- ITIN. For borrowers who file taxes with an Individual Taxpayer Identification Number. See my ITIN mortgage guide.
Texas down payment help
The Texas Department of Housing and Community Affairs (TDHCA) and the Texas State Affordable Housing Corporation (TSAHC) run programs that can include down payment assistance and mortgage credit certificates, with income and price limits. Some Valley cities and local housing groups add programs when funded. Ask a participating lender what is open now and whether the help must be repaid.
Step 3: Get pre-approved and choose your team
A pre-approval means a lender has reviewed your pay stubs, W-2s or tax returns, bank statements and credit. Sellers weigh it far above a pre-qualification.
Before touring, expect to sign a written buyer representation agreement covering what your agent will do and how the agent is paid. Both are negotiable. I walk through mine line by line.
Step 4: Shop with Valley specifics in mind
- Flood zone. Much of the Valley is low and flat. Check FEMA's flood maps and get an insurance quote early. Lenders require flood insurance in some zones, and it is worth considering in others.
- Wind and hail. Premiums vary with location and roof age. In parts of Cameron County, including South Padre Island, windstorm coverage often comes through the Texas Windstorm Insurance Association (TWIA).
- Districts. HOAs, municipal utility, public improvement and some irrigation districts add dues, taxes or assessments. Ask early; they usually surface in disclosures, the title commitment or tax certificates.
- Daily routes. Drive your regular routes at real hours, including expressway and bridge traffic.
My community pages compare each city's layout, amenities and school districts.
Step 5: Make an offer on the TREC contract
Most Texas resales use the Texas Real Estate Commission (TREC) One to Four Family Residential Contract (Resale). Key terms:
- Earnest money. Held by the title company and credited at closing; at risk if you default outside the contract's protections.
- Option fee and period. A negotiated fee, delivered to the title company within three days of the effective date, buys the unrestricted right to terminate for a set number of days. It is typically credited if you close. Terminate on time and you generally recover your earnest money, but not the option fee.
- Financing addendum. The Third Party Financing Addendum protects your earnest money if loan approval falls through within its window.
- Seller's Disclosure Notice. Texas single-family sellers generally must disclose known conditions, with exceptions such as some estate and foreclosure sales.
Step 6: Inspect, appraise and clear title
During the option period, hire a TREC-licensed inspector, plus specialists for foundation, roof, sewer line or wood-destroying insects as needed. Then request repairs, a credit or a lower price, or walk away.
Your lender orders the appraisal. The title company issues a title commitment listing liens, easements and restrictions. The Texas Department of Insurance sets title premiums, so the base premium is the same at any title company; escrow and service fees differ. You also need a survey, or the seller's existing one with a T-47 affidavit if the lender and title company accept it.
Step 7: Close, then file your homestead exemption
Texas closings happen at the title company. Bring valid ID, send funds exactly as instructed, and confirm wiring instructions by phone at a number you already trust. Wire fraud targets real estate closings.
Once you live in the home, file the free residence homestead exemption with the Hidalgo County Appraisal District or the Cameron Appraisal District. It lowers your taxable value and limits how fast it can rise each year. Plan your cash to close with the closing cost estimator.
How I help first-time buyers
Six years in key-account sales at PepsiCo taught me disciplined deal-making: a clear budget, a short list grounded in facts, and calm negotiation when the inspection report lands. Book a call for a plan built on your numbers.
