What You Should Know Before Buying a Home in Texas
Last Updated: December 27, 2022

What You Should Know Before Buying a Home in Texas

If you’re looking to buy a home in Texas, be aware that you’re not the only one. The “Lone Star State” has a big draw when it comes to relocation. 

In fact, nearly 1,000 people move here every day, which could make house-hunting a little more challenging.

If you plan to buy a home in Texas, a little pre-game research and strategy will go a long way during your hunt. 

You’ll find typical market variations between Dallas’s big city life, Waco’s suburban neighborhoods, and the longhorn ranches speckled through the Texas countryside. 

Nonetheless, get to know Texas a little better so that when you are ready to buy a home, you have an idea of what it has to offer.

What is Texas Known For?

Texas has a rich history and is known for its BBQ, oil, and famous people like Selena Gomez, Kelly Clarkson, and Lance Armstrong. 

Here are the 5 things that Texas is known for.


People in Texas love their BBQ. It’s so famous that people from other states go to Texas to learn how to smoke the meat. 

Energy Resources

Did you know that Texas is the top crude oil producer in the nation? According to the U.S Energy Information Administration (EIA), Texas can process 32% of the nation’s refinery capacity as of January 2021. 

There is no doubt that Texas’s 268,596 square miles make it the second largest state in the country, and it has great energy resources such as coal, natural gas, petroleum, and electricity.


NASA Lyndon B. Johnson Space Center (JSC) is located in Houston, Texas, and it’s best known for NASA’s Astronaut Corps and Mission Control. The JSC is focused on human space exploration and employs 3,100 individuals. 

Country Music

Country music continues to grow in popularity worldwide, and we should be thanking Texas for that. The cool thing about Texas is that you can also find a lot of live country music playing at venues.  

Affordability: What Are The Home Prices in Texas?

According to redfin.com, the median list price in Texas is $384,000. Now let’s look at the medium prices for the most popular cities in Texas.

Texas Real Estate Prices Median List Price 

Texas real estate prices have increased over the last decade. For example, in 2011, the median price was $146,988, and as of October 2022, it is at $335,00. Still, median prices vary from city to city, and below, you can see how they fluctuate. 

20 Texas cities’ median list prices

City Median List Price
Frisco $703,300
Austin $540,000
Cedar Park $522,000
Dallas $403,000
Denton $385,000
Irving $360,000
Arlington $347,000
Fort Worth $339,000
McAllen $315,000
Houston $305,000
Brownsville $299,000
Waco $285,000
San Antonio $280,000
El Paso $262,000
Lubbock $250,000
Armadillo $249,000
Laredo $230,000
Wichita Falls $195,000
Beaumont $168,000
Corpus Christi $69,900

Data as of November, 2022.

What is the Cost of Living in Texas?

According to The Council For Community and Economic Research, Harlingen and McAllen, Texas, were the least expensive areas in the Cost of Living Index. The cost of living in Texas is like anywhere else in the country. The cost is dependent on where you select to live. 

For example, a home in Dallas could be more expensive than in a smaller city like Tulsita. This is also true when comparing the cost of living between other states like California and Texas below.

Cost of Living Comparison Between Texas and California

Example 1.

Orange County, California vs. Austin, Texas

Result: Austin, TX, cost of living is 34.58% lower than Orange County, CA.


Example 2.

San Diego, CA  vs. Corpus Christi, Texas

Result: Corpus Christi, TX, cost of living is 37.47% lower than San Diego, CA.

Although the cost of living has increased in 2022, Texas has many affordable cities. If you are moving from Orange County, California, you might find it cheaper in Texas. 

If you are moving from within Texas, it could be more affordable, depending on the city you select. Of course, you must also check and see how much home you can afford before choosing a city.

To figure out your cost of living, check out this calculator that can give you an idea. 

The cost of living is one thing to consider when buying a home in Texas, but what about the weather in Texas? You should find out how hot or cold it gets if you care about the weather.

How is the Weather in the State of Texas?

The lone star gets its share of weather swings from humid hot, cold, and rain. If you are wondering which city in Texas has the best weather, it depends on the city, and according to Texasview.org, Huston has the best weather. 

Keep in mind that Texas also has some beach cities, such as Galveston and Corpus Christi, that make it an attractive place for those looking for the beach and coastal lifestyle.

How Much are Property Taxes in Texas?

Although Texas has no property tax, according to Texas Comptroller, the local governments and special taxing districts levy taxes on real and tangible personal property. 

This is done by all property being appraised at full market value, and taxes are assessed by the local county assessors on 100% of appraised value. 

According to tax shark, the average property tax rate is approximately 1.80%. If you think this is higher than expected, remember that Texas has no state income tax, which is an excellent benefit for high-income individuals. 

Examples of property taxes in Texas 

Example 1. The property is valued at $550,000. 

$550,000 X 1.80% = Your tax rate is $9,900

Example 2. The property is valued at $250,000.

$250,000 X 1.80% = Your tax rate is $4,500

Check out the appropriate jurisdiction where you will be purchasing to get an idea of the total tax rate by that city and county. 

Ask your realtor about the property tax cost so that it does not shock you when the bill arrives.

Start looking at your options

Promise Home Loans is here to help.

Requirements to Buy a Home in Texas

A few advantages to living in the South may make Texas such a desirable location. For one, the weather is typically warmer throughout the year. Another fact, though, is that buying a home here can be relatively affordable for most.

According to Zillow, the average cost of a Texas property is $315,847. This includes heavily populated metropolitan areas and more rural zones, so this number is a great outlook for the entire state.

Before you start the hunt for your dream home, be aware of what it takes to get approved for a mortgage loan. 

While each lender has a unique set of qualifications, there are a few things to consider before getting a mortgage loan.

A credit score of 620 or higher: 

Lenders will check your credit to see how much you can qualify for. To ensure your credit report is accurate, get a free credit report to see if everything is correct.

Down payment and closing costs:

Once you have figured out how much home you can afford, make sure you have enough money for a down payment. Depending on the type of loan you qualify for, you may have to put up to 20% down. 

There is a first-time homebuyer mortgage program that you can also ask your loan officer  about to see if you qualify. It never hurts to ask!

Income verification:

Lenders will need to verify your income to ensure you have the money to pay your mortgage. So, be prepared to show proof of income by preparing any pay stubs and bank statements.

Note: Some lenders automatically verify your income with your bank.

Debt-to-income ratio (DTI):

Lenders use a DTI to determine the mortgage amount for which a borrower qualifies. The DTI is calculated by dividing your total recurring monthly debt by your gross monthly income(s). 

DTI Calculation: let’s say 2700 is your total recurring monthly debt, and your gross monthly income is 8500.       

DTI Calculation:  2700 ÷ 8500 = 0.32

Your DTI is 0.32


What is a good DTI for getting a mortgage?

Lenders have different percentages of what they consider a good debt-to-income ratio. Some lenders are okay lending to you if your DTI is below 43% but having anything around 36% is a better sign that you can manage the mortgage payments. 

Tip: It’s essential to keep your DTI and credit score at an acceptable level so lenders can approve you for a mortgage. 

While knowing the minimum requirements for buying a home is important, it’s also noteworthy to consider that these depend on a few circumstances. If you have a high credit score but a higher DTI, then those two factors are weighed together.

These are all considerations in the process, and nothing single-handedly determines a potential buyer’s qualification.

Getting Serious to Buy a Home in Texas

If you’re serious and ready to purchase a Texas home, then seeking pre-approval is critical. Pre-approval refers to choosing your lender, providing your financial information, and getting an official letter detailing your qualification for a new home loan that you can give your realtor to start shopping.

Choosing the Right Type of Loan

Your pre-approval letter will serve as a badge of honor during your hunt. It shows sellers and real estate agents you’re serious and ready, so do your research here and know what loan you need and the lender who provides it. 

Typical mortgage loans include:

  •  Conventional Loans: These loans don’t fall under any government program. They typically require a downpayment and more leg work to obtain but can save you money in the long run.
  • FHA Loan: The Federal Housing Administration (FHA) loans can be a great lending resource for buyers with a lower credit score or who may not have a large down payment. FHA loans are popular among first-time home buyers.
  •  USDA Loan: These loans serve those who may be in a lower-income bracket and can help buyers purchase a property with no down payment. They are generally location specific, though
  •  VA Loans: While these loans are offered to military service members or veterans, they have more lenient qualifying requirements.

After you know which type of loan would suit your financial goals, you can start the process of getting pre-approved for the mortgage. There is a bit of leg work here and plenty of paperwork to provide, but this process will save you time later.

During the process, make sure you have the following documents handy:

  • Income Verification
  • Tax Records
  • Bank Statements
  • Debt Paperwork
  • W-2 Statements

Once your pre-approval has been granted, you’ll get an official letter. The letter will detail how much of a mortgage you can get funded, which is a great resource. After all, you don’t want to search for $400K homes if your loan approval amount is only 300K.

Searching For a Home in Texas

The nation is suffering from low inventory regarding the housing market, and parts of Texas feel those effects too. Suppose you’re searching in heavily populated areas like Dallas or Austin.

In that case, you could run into a hot market engaged in bidding wars.

An experienced real estate agent can help a potential buyer navigate these troubling waters. 

Moreover, hiring an agent to help you during your search has several other advantages.

Real estate agents have powerful negotiation skills, connections to resources, and detailed knowledge of the local landscape.

So, while you’ve likely come up with a list of desirable qualities and necessities for your future home, your agent can advise you easily on the best areas to search. 

Keep in mind, though, that home buying often comes with compromise. Decide what you consider essential and what would be nice to have in a home.

For example, if you’re moving to Texas and are interested in the top-rated schools, you’ll have a few different options. 

According to U.S. News, the top 6 Texas School districts are located within the following cities:

  • Austin, TX
  • Corpus Christi, TX
  • Southlake, TX
  • Longview, TX
  • Dallas, TX
  • Midland, TX

Let’s discuss the cities below

Austin, Texas

If you’re eyeing Austin, Texas, you should know that the Allendale neighborhood offers a central location with quiet, tree-lined streets.

You also have access to Austin’s exceptional schools. 

Similarly, Cedar Park offers traditional, family-friendly suburban living in the Austin area. Downtown Austin is full of the hustle and bustle, feeling a little more like Los Angeles or New York City. 

And Dripping Springs provides the traditional Texas feel, billed as “The Gateway to the Texas Hills.”

School with top reviews in Austin, Texas:

  • NYOS Charter School
  • Austin International School
  • Lively Middle School

Corpus Christi, Texas

Corpus Christi offers a little more balance between city life and family-friendly amenities that still comes with access to great schools. 

Downtown offers the city feel with access to shopping, dining, and nightlife without being a ‘big city.’ Families enjoy the Bay Area, Central City, or Ingleside for the balance of coastal nature and city amenities with great schools.

School with top reviews in Corpus Christi, Texas:

  • Smith Elementary School
  • Incarnate Word Academy
  • School of Science and Technology

Southlake, Texas

Another area with great schools that attract families is Southlake, Texas. It’s a suburb of Dallas offering a family-friendly balance, including shopping, dining, and access to top-rated education. 

Among the top schools in Southlake, you’ll find Carroll Independent School District and Grapevine-Colleyville Independent School District at the top of many parents’ wishlists. Both schools have student proficiency rates at or above 90%, making them some of the best schools in Texas.

School with top reviews in Southlake, Texas:

  • The Goddard School of Southlake
  • Fusion Academy Southlake
  • Don T Durham Intermediate School

Longview, Texas

A small city ranked by Forbes as one of the best places for business and career is perfect for those looking to get away from the hustle and bustle of a big city. Longview it’s also very affordable, with an overall cost of living index of 85/100. 

According to Redfin, the average sale price of a home in November 2022 was $230,000. 

Schools with top reviews in Longview, Texas

  • Trinity School of Texas
  • Hudson Pep Elementary School
  • Longview High School

Dallas, Texas

Dallas is home to the Dallas Cowboys and is known for its oil, technology, manufacturing, defense, financial services, and sports. It’s a place with a little bit of everything for everyone. 

Dallas also comes on top for those looking for a great place to live with top schools. Many of the schools are highly rated by the Niche. 

If education is something that you care highly about, know that Dallas is highly educated. Dallas has eight of the 20 best schools in the state of Texas. 

Schools with top reviews in Dallas, Texas:

  • The School for the Talented and Gifted
  • Irma Lerma Rangel Young Women’s Leadership School
  • Science and Engineering Magnet School (SEM)

Midland, Texas

Midland, Texas nicknamed “The Tall City” and known for its downtown skyline. 

Schools with the top reviews in Midland, Texas

  • Midland Academy 
  • Fannin Elementary
  • Premier High School

I know that we covered only a few cities but if you are curious about a particular public school, learn about it by going to the Texas Education Agency. You will be able to get information about the ratings and school performance. 

Still, there’s something to be said about the mild weather year-round or a slower pace of a smaller town. These are all considerations during your hunt for the perfect Southern home.

Suppose you’ve viewed several properties and found some that check off your essentials with a few desirable traits too. 

In that case, it’s time to make a decision and submit an offer. If you choose to go with a real estate agent, they’ll handle this aspect of the buying process.


Closing in on Your Deal

Once the seller accepts your offer to buy their home, the closing process starts. Yes, it’s a whole process. You’ll need to appraise the home, which is a necessary step. 

Appraising your potential home can cost between $300-$500 and is the buyer’s financial responsibility. Still, it ensures a fair market value of the home.

After the appraisal process is the home inspection; while some types of mortgages don’t require a home inspection, skipping this step is rarely advisable. Suppose you skip the inspection and later find out that your new home needs foundational work. 

As the residence owner, that’s now your big financial burden. Still, an inspection could have identified that issue before the deal was made.

In most cases, the appraisal process and inspection go off without a hitch. Still, after the inspection, there may be some negotiation if any repairs are identified.  

Your real estate agent can communicate your desires before it’s time to come to the closing table. The process typically takes 30-45 days, from offer to closing.

Once you sit down at the closing table, you’re on your way to being a new homeowner. Bring a pen, your government-issued identification card, and the agreed-upon closing costs. 

Closing costs include a percentage of the purchase amount and fees associated with the loan terms. You’ll typically know this amount a few days before closing.

Final Thoughts on Purchasing a Texas Property

Texas has many advantages if you’re looking to buy a new home. Housing is more affordable, the weather is nicer, and people flock here in droves. 

Still, it could require some prep work and patience if you want a successful search for your dream home. Preparation is key in many aspects of life.

Knowing which type of mortgage to seek and hiring an experienced real estate agent are two ways to help make the process easier. Shopping around for your preferred lender and your property will help make your future home more affordable and, thus, enjoyable.

Are you ready to see how much you qualify for? Apply here, or talk to someone directly; call us at 888-762-7808

Get Pre-Approved Today

Buy a home or start saving, we make it easy.