First-Time Home Buyer's Complete Guide to North Texas Real Estate
Navigate financing, inspections, and closing costs across Denton, Collin, Wise, and Tarrant County markets.
Understanding Your Pre-Approval and Budget in North Texas
Before you start house hunting in North Texas, getting pre-approved for a mortgage is your first critical step. Pre-approval gives you a clear understanding of how much you can borrow and demonstrates to sellers that you're a serious buyer. This process typically takes 3-5 business days and involves submitting financial documents to a lender.
Getting Pre-Approved
During pre-approval, lenders will review your credit score, income, employment history, and existing debts. A credit score of 620 or higher is generally required, though scores above 740 typically qualify for better interest rates. North Texas lenders often require proof of employment, tax returns from the past two years, and bank statements showing your down payment funds.
The pre-approval letter specifies your maximum loan amount, which forms the foundation of your budget. Remember that your pre-approval amount isn't necessarily what you should spend—factor in property taxes, homeowners insurance, HOA fees, and maintenance costs.
Setting Your Budget
North Texas offers diverse price points across its four main counties. A practical rule is to spend no more than 28% of your gross monthly income on housing costs. This includes mortgage principal, interest, taxes, and insurance (PITI). Consider these additional expenses:
- Property taxes (vary by county)
- Homeowners insurance ($800-$1,500 annually)
- HOA fees (if applicable)
- Maintenance reserves (1-2% of home value annually)
- Utilities and ongoing repairs
Key Differences: Shopping Across Denton, Collin, Wise, and Tarrant County Markets
Each North Texas county presents unique market characteristics, price ranges, and lifestyle considerations. Understanding these differences helps you make an informed decision about where to buy.
Denton County
Denton County offers a blend of suburban comfort and growing urban amenities. Home prices range from $250,000 to $500,000+ depending on proximity to Denton or Lewisville. The county attracts families seeking good schools and newer construction. Expect moderate property tax rates and a younger demographic. The area is experiencing steady growth with new developments regularly opening.
Collin County
Known for excellent schools and affluent communities, Collin County is one of North Texas's most competitive markets. Home prices typically range from $350,000 to $800,000+, with premium properties in Plano and Frisco commanding higher prices. Collin County has slightly higher property taxes but offers superior school ratings. This county attracts professionals and established families willing to pay for quality education and amenities.
Wise County
Wise County represents the most affordable option for first-time buyers seeking space and a rural lifestyle. Homes range from $150,000 to $400,000, offering more square footage for your budget. The county appeals to buyers wanting acreage, privacy, and a slower pace of life. Be prepared for longer commutes to Dallas-Fort Worth employment centers and fewer urban conveniences.
Tarrant County
Tarrant County encompasses Fort Worth and surrounding suburbs, offering diverse neighborhoods and price points ($200,000-$600,000+). The county provides a balance between urban amenities and suburban living. Tarrant County has competitive property taxes and strong job markets, making it attractive for various buyer profiles. Growth is steady with ongoing infrastructure improvements.
Essential Steps Before Making an Offer: Inspections and Due Diligence
Once you've found a property, thorough due diligence protects your investment and prevents costly surprises after closing.
The Home Inspection
Never skip the home inspection—this is your opportunity to identify structural issues, mechanical problems, and needed repairs. A qualified inspector examines the roof, foundation, HVAC system, plumbing, electrical systems, and more. The inspection typically costs $400-$600 and takes 2-3 hours. Request the inspection within 7-10 days of making an offer, as most contracts include a 10-day inspection contingency period.
Review the inspection report carefully and discuss findings with your real estate agent. Minor issues are normal in older homes, but major problems like foundation damage or roof replacement needs should factor into your offer or negotiation strategy.
Additional Due Diligence
Beyond the standard inspection, consider these important steps:
- Pest Inspection: Termites and other pests are common in Texas. A pest inspection costs $75-$150 and can reveal costly infestations.
- Survey: Verify property boundaries and identify encroachments. Cost ranges from $300-$500.
- Title Search: Your title company will conduct this, ensuring the seller has clear ownership rights.
- Appraisal: Your lender requires this ($400-$600) to ensure the property value supports the loan amount.
- Neighborhood Research: Check crime rates, school ratings, future development plans, and flood zones.
Understanding Contingencies
Your purchase contract should include contingencies protecting you if issues arise. Standard contingencies include inspection, appraisal, and financing contingencies. These allow you to renegotiate or withdraw from the purchase under specific circumstances. In competitive North Texas markets, sellers may request shorter contingency periods, so be prepared to move quickly.
Closing Your Purchase: Timeline and Final Preparations
The closing process typically takes 30-45 days from offer acceptance to final walkthrough and signing documents.
The Closing Timeline
After your offer is accepted, your lender orders the appraisal (days 1-3). Once the appraisal is received and approved, underwriting begins (days 5-15). During underwriting, the lender reviews all documentation and may request additional information. Your title company simultaneously conducts the title search and prepares closing documents. A final walkthrough occurs 24 hours before closing to verify agreed-upon repairs are complete and the property condition hasn't changed.
Closing Costs and Final Numbers
Closing costs typically range from 2-5% of the purchase price and include:
- Loan origination fees (0.5-1% of loan amount)
- Title insurance and search fees
- Appraisal and inspection fees
- Property taxes and homeowners insurance (prorated)
- Attorney fees (if applicable)
- Recording and transfer fees
Request a Closing Disclosure at least three business days before closing. This document details all final costs and loan terms. Review it carefully and ask your lender to explain any unfamiliar charges.
Final Preparations
Before closing day, arrange homeowners insurance and provide proof to your lender. Set up utility transfers for your move-in date. Conduct a final walkthrough to ensure the property is in agreed-upon condition. Bring a valid ID and cashier's check or arrange wire transfer for your down payment and closing costs. At closing, you'll sign numerous documents including the promissory note, deed of trust, and closing disclosure.
After signing, the title company records the deed, and you receive the keys to your new North Texas home. Congratulations—you've successfully navigated the first-time home buying process!
