Home Buying Guide 2026

1. Getting Started: Are You Ready to Buy?

Before diving into the home search, take time to assess your readiness. Buying a home is likely the largest financial decision you'll make, so preparation is key.

Financial Readiness Checklist

• Credit Score: Aim for 620+ for conventional loans, though 740+ gets the best rates
• Down Payment: 3-20% depending on loan type (more on this below)
• Debt-to-Income Ratio: Generally under 43% for approval
• Emergency Fund: 3-6 months of expenses beyond your down payment
• Stable Employment: 2+ years in same field preferred

2. Financing Your Home

Understanding your mortgage options is crucial for making informed decisions. In 2026, buyers have several loan programs available.

Popular Loan Types

• Conventional Loans: Requires 3-20% down, best for buyers with strong credit (680+)
• FHA Loans: 3.5% down with 580+ credit, more flexible qualification
• VA Loans: 0% down for eligible veterans and service members
• USDA Loans: 0% down for rural areas (much of Texas qualifies)
• Jumbo Loans: For properties over conforming loan limits

2026 Interest Rate Environment

Mortgage rates in early 2026 are hovering in the 6-7% range. While higher than historical lows, today's rates are still manageable. Remember: you can refinance later if rates drop, but you can't go back in time to buy a home that appreciated.

3. Finding the Right Agent

A buyer's agent represents your interests throughout the transaction at no cost to you (the seller typically pays commission). Here's what to look for:

• Local Market Expertise: Choose an agent who knows your target neighborhoods intimately
• Full-Time Professional: Part-time agents may not be available when you need them
• Communication Style: Find someone who matches your preferred communication frequency and method
• Track Record: Ask about recent transactions and client references
• Negotiation Skills: Your agent should be a strong advocate for your interests

4. House Hunting Tips

Once you're pre-approved and have an agent, the fun begins. Make the most of your search with these strategies.

Define Your Must-Haves vs. Nice-to-Haves

Create two lists: non-negotiables (bedrooms, location, school district) and preferences (pool, updated kitchen). Be realistic - you may not find everything on your wish list.

What to Look For During Showings

• Foundation condition (look for cracks, uneven floors)
• Roof age and condition
• HVAC system age (replacement can cost $8,000-15,000)
• Water pressure and plumbing
• Electrical panel capacity
• Natural light and layout flow
• Storage space
• Neighborhood noise and traffic

5. Making an Offer

When you find "the one," it's time to make an offer. Your agent will guide you through the Texas Real Estate Commission (TREC) contract.

Key Offer Components

• Price: Based on comparable sales and market conditions
• Earnest Money: Typically 1-3% of purchase price
• Option Period: Texas-specific period (usually 7-10 days) to inspect and back out
• Financing Contingency: Protects you if your loan falls through
• Closing Date: Usually 30-45 days from contract execution

6. Under Contract to Closing

Congratulations! You're under contract. Here's what happens next.

7. Texas-Specific Considerations

Texas has unique aspects to home buying that out-of-state buyers should understand.

Property Taxes

Texas has no state income tax, but property taxes are higher (typically 2-3% of assessed value). Budget accordingly and research exemptions you may qualify for (homestead, over-65, disabled).

HOA Communities

Many Texas neighborhoods have HOAs. Review documents carefully for rules, fees, and restrictions before buying.

Insurance Considerations

Standard homeowner's insurance doesn't cover flooding. If you're in a flood zone (or near one), budget for flood insurance. Also consider windstorm coverage for coastal areas.

The Option Period

Texas uses an "option period" rather than a traditional inspection contingency. You pay a small fee (usually $100-500) for the right to terminate for any reason during this period. Use it wisely.