Buying your first Houston home: five things to plan for

You may already be saving for a down payment and looking at listings. Before you tour, work through the full monthly cost and the cash you will need at closing.

These five questions can help you prepare.

1. What down-payment options can I compare?

The 20% down rule is a holdover from a different era of real estate. Today, most first-time buyer programs require 3–5% down, FHA loans go to 3.5% with more flexible credit requirements, and VA loans (for eligible military) can be zero down.

Compare the full monthly payment as well as the down payment. A 5%-down loan with PMI on a $325,000 home in Katy might cost less per month than rent on a comparable place — but only if the property tax escrow doesn't break the budget.

Property taxes are part of that comparison.

2. Include property taxes in the monthly budget

Houston property tax rates run 2.0%–3.2% depending on jurisdiction (city, county, school district, MUD, levee district, drainage). On a $325,000 home in a high-MUD area, the tax bill alone can be $850/month — escrowed into your monthly payment.

A principal-and-interest quote leaves out taxes and insurance, so it is not the amount to compare with your rent. Always ask for the full PITI quote: Principal, Interest, Taxes, Insurance.

3. Closing costs are 2–5% on top of the down payment

Ask for an estimate of closing costs early. Lender fees, title fees, prorated property taxes, prepaid insurance, and HOA estoppel typically add up to 2–5% of the purchase price.

On a $325,000 purchase, that's $6,500–$16,250 in cash you need at the closing table — separate from your down payment. Some lender programs let you negotiate seller-paid closing costs, but in a tight market it weakens your offer. Plan to bring that cash yourself.

4. Pre-qualified ≠ pre-approved

Lenders may use these terms differently. A pre-approval letter is a tentative assessment of what you may be able to borrow, not a guaranteed loan. Ask what documents have been reviewed and what conditions remain.

Before making an offer, confirm the loan amount, estimated cash to close, expiration date, and remaining conditions with the lender. The CFPB explains pre-qualification and pre-approval in more detail.

5. Compare the offer terms alongside the price

Headline price is one variable. The other variables are closing timeline, financing contingencies, option period length, and whether you're flexible on the seller's preferred close date.

Work with your lender and agent on terms you can meet. A shorter closing or option period is not automatically better for you. Any option period, fee, and notice deadlines must be negotiated and followed under the contract.

Questions to check before making an offer

| Common belief | Houston reality | | --- | --- | | You need 20% down | Many programs require 3–5% | | Pre-qualified is enough | Ask what the lender has verified and what remains | | Listing price = total cost | Add 2–5% for closing, plus monthly tax escrow | | Highest offer wins | Price, conditions, and timing all matter | | The market will drop, just wait | Compare your budget and reserves; future prices are uncertain |

Where to start

Start with a lender review and an agent who will answer your questions. If you prefer Vietnamese, Mandarin, or Cantonese, let us know. CGP offers the same service, responsiveness, and pricing in every language, and you can include a trusted advisor in the conversation.

Schedule a 15-minute buyer strategy call and we'll walk through your specific situation. No pressure, no commitment.