First-time home buyer guide for Austin
Everything you need to know before you write your first offer.
Buying your first home in Austin in 2026 is different than it was a few years ago — and most online guides are out of date. Here is what to actually do, step by step.
How much house can I afford in Austin?
Rule of thumb: total monthly housing cost (principal + interest + property tax + insurance + HOA) should be under 30% of gross monthly income. Property tax and insurance vary a lot by location, so use a calculator that reflects the real rates for Austin rather than a generic national one — those two lines surprise first-time buyers most.
What credit score do I need?
620 is the floor for conventional. 580 for FHA. 740+ unlocks the best rates. If you're under 700, spending 3-6 months improving your score before buying often beats house-hunting now. Pay down credit card balances to under 30% of limit, do not open or close anything new.
What's the down payment situation?
Conventional minimum is 3%. FHA is 3.5%. Most states and many cities run down-payment assistance programs (grants or second loans) for first-time buyers, and some employers — school districts, fire/EMS, hospitals — have their own. Always check what's available locally before assuming you need 20%.
Get pre-approved, not pre-qualified
Pre-qualification is a soft estimate based on what you tell the lender. Pre-approval means the lender pulled your credit, verified income/assets, and is committing to a loan amount in writing. In a competitive Austin market, most sellers won't seriously consider offers from buyers who only have pre-qualification. Get pre-approved from at least 2 lenders to compare rates and credits.
Property tax surprise
Property tax can vary widely between two homes a mile apart, depending on the taxing districts that apply. Always pull the actual tax record for any home you're seriously considering — the MLS list price line never tells you the real annual tax bill.
Flood and natural-hazard reality check
Check the flood zone and any local natural-hazard disclosures before you offer. Flood insurance can run hundreds to a few thousand dollars a year and lenders require it in high-risk zones. Ask the listing agent for the property's past flood/claim history — if they won't share it, that's a red flag.
Inspection contingency: don't waive it
In a hot market, buyers waive the inspection contingency to win offers. Don't, on your first home. Hire your own inspector ($400-600), get a full report, and use the contingency to negotiate fixes or a credit. Pay for an HVAC and plumbing scope too if the home is older than 15 years.
Closing costs
Plan for 2-4% of purchase price in closing costs (title insurance, lender fees, escrow, surveys, doc prep, first-year homeowners insurance, property tax pro-ration). Some can be negotiated as seller concessions. Your lender's Loan Estimate breaks it all out. Read it line by line.
First-year homeowner mistakes to avoid
1. Skipping the homestead/homeowner exemption your state offers (file it the first year — it can cap how fast your assessed value rises). 2. Over-improving before you live in the house long enough to know what you actually need. 3. Refinancing too early (most loans charge prepayment fees in year 1; wait until rates drop at least 0.75% to justify costs). 4. Ignoring HOA documents (read the bylaws, financials, and special-assessment history).