The short version
Here’s the order I’d do it in:
- Get pre-approved.
- Line up the cash you need besides the down payment.
- Check the state programs before you shop.
- Check the address, not just the house.
- Use the protections in your contract.
- Close, then file your homestead exemption.
Each step is below, with links to the longer answers.
Do I count as a first-time buyer?
Probably, even if you’ve owned before. For TDHCA’s My First Texas Home program, a first-time buyer is someone with no ownership interest in a primary residence in the past three years. TDHCA waives that rule for veterans and for homes in qualified targeted census tracts.
And plenty of help isn’t limited to first-time buyers anyway. More on that below.
Step 1: Get pre-approved before you look
Get pre-approved before you fall for a house. It tells you a real price range, and it makes your offer stronger, because the seller can see someone has actually looked at your file.
A pre-approval is not the final loan approval. In a Texas contract, the Third Party Financing Addendum gives you a set number of days to get approved, and a way out with your earnest money if the lender can’t approve you. The deadlines are strict, so we’ll keep your file moving.
Step 2: Plan for the cash beyond the down payment
This is the part that catches first-time buyers. The down payment isn’t the only check you write.
- Earnest money and the option fee. On a Texas resale contract you deliver both to the escrow agent named in the contract, usually the title company, within 3 days after the contract’s Effective Date. The option fee buys you the option period, when you can back out for any reason. If you close, the option fee is credited toward the price.
- Inspection. Schedule it inside the option period, so you can still back out over what it finds.
- Closing costs. TSAHC’s list of common ones includes loan origination fees, the appraisal, title insurance, escrow fees, recording fees, and prepaid property taxes and insurance.
- Escrow. FHA requires an escrow account for property taxes and homeowners insurance, and TSAHC counts tax and insurance prepayments among common closing costs.
Some of these costs aren’t up to anyone in the room. The Texas Department of Insurance sets title insurance rates (opens in new tab), so the premium is the same at every title company. Here’s how picking a title company works. The Tarrant County Clerk publishes its recording fees (opens in new tab). And since 2016 the Texas Constitution (opens in new tab) has barred any new law that taxes the sale of a house.
Your Loan Estimate (opens in new tab) will list your costs line by line. Ask me for one early so the number isn’t a surprise.
Step 3: Look at the state programs before you shop
I’m approved with the Texas state programs from the Texas Department of Housing and Community Affairs (TDHCA) and the Texas State Affordable Housing Corporation (TSAHC). They work anywhere in Texas, including Fort Worth.
- TDHCA My First Texas Home. A home loan with down payment assistance for first-time buyers, on FHA, VA, or USDA loans.
- TDHCA My Choice Texas Home. The same idea with no first-time buyer requirement. It can also be used with a conventional loan.
- TSAHC Homes for Texas Heroes. For teachers and other full-time public school educators, police and public security officers, firefighters, EMS, corrections officers and county jailers, nursing and allied health faculty, and veterans and active military.
- TSAHC Home Sweet Texas. For low- and moderate-income buyers who aren’t in one of the hero professions.
- Mortgage Credit Certificate. A federal income tax credit tied to the mortgage interest you pay. TDHCA offers one to first-time buyers and veterans, with a TDHCA loan or on its own. TSAHC offers one to first-time buyers too.
The fine print matters. These programs have income and purchase price limits that depend on the county and your household size. TDHCA requires every borrower to finish a HUD-certified homebuyer education course. And you have to live in the house as your main home.
Do this before you shop, because the program can change your price range. More on my down payment assistance page.
Step 4: Check the address, not just the house
Fort Worth is big, and the address changes more than you’d think.
- County and appraisal district. Fort Worth’s city limits reach into Tarrant, Denton, Johnson, Parker, and Wise County. Most of the city is in the Tarrant Appraisal District (TAD), but check the address.
- School district. Fort Worth is split among several school districts. Walsh, for example, has a Fort Worth address and Aledo ISD schools. Check the district for the exact address.
- MUD or PID. Some newer communities carry a MUD tax or a PID assessment on top of regular property taxes. The seller has to give you a written notice before you sign. Here’s how MUD and PID taxes work.
- Older houses. If the house was built before 1978 and you’re using FHA, chipping or peeling paint has to be fixed before closing. Foundations come up a lot around here too. Here’s what to do about foundation issues.
All of that feeds your payment, because taxes and assessments go into escrow. If you’re going FHA, here’s the Fort Worth FHA loan limit.
Step 5: Use the protections in your contract
You have two big ones on a Texas resale contract:
- The option period. A set number of days to back out for any reason. Get your inspection done and your questions answered inside it. The notice has to be in by 5:00 p.m. local time on the last day.
- The Third Party Financing Addendum. Your way out with your earnest money if the loan can’t be approved or the house doesn’t meet the lender’s requirements, as long as you meet its deadlines.
Step 6: Close, then file your homestead exemption
At closing you sign at the title company and get the keys. Then, once it’s your main home, file a homestead exemption with the appraisal district. For most of Fort Worth that’s TAD. It’s free, you file once, and it lowers the taxable value of your home. Here’s how the homestead exemption works.
The hard part, and what nobody knows
The hard part for most first-time buyers isn’t the down payment. It’s the cash for everything around it, plus the income and price limits on the programs that help with it. Find that out first, and the rest is a checklist.
What nobody knows: whether program money will be open on the day you need it. TDHCA’s lender guide says its bond programs are subject to funding availability, first come, first served, and TDHCA says its Mortgage Credit Certificates are limited. Nobody can promise you what your tax bill will be after the house is reappraised, either. We plan with today’s numbers and check them again before you close.
The next step
You can do this, and you don’t have to figure out the order alone. Send me the short form or call me at 817-873-6288. Tell me roughly where in Fort Worth you want to buy, your rough price, and whether you might fit one of the state programs. I’ll tell you what you’d need and what to do first.