What Information Do First-Time Home Buyers Need Before Starting Their Search?

What Should First-Time Buyers Know Before Looking at Homes?

Quick Answer: First-time home buyers need five categories of information before starting their search: financial readiness assessment, loan pre-qualification details, market-specific knowledge for their target area, total cost of ownership calculations, and clarity on their must-haves versus nice-to-haves. Gathering this information first prevents the emotional decisions that cost buyers money.

Discuss your first-time buyer situation: Book a free call at https://askweldonhobbs.com (20+ years guiding first-time buyers through decision frameworks nationwide)

In my 20+ years helping hundreds of families navigate first-time home purchases nationwide, I've worked as a Certified Financial Coach to help clients understand what they actually need to know versus what the internet overwhelms them with. I'm Weldon Hobbs, and I've learned that information overload causes as many problems as information gaps—knowing what to focus on is half the battle.

Whether you're searching for first-time home buyer information in Texas, California, Florida, or any other state, the foundational preparation follows the same pattern. State-specific details like assistance programs and closing cost norms layer on top of universal preparation principles. Let's start with what matters everywhere, then address regional considerations.

What Financial Information Must First-Time Buyers Gather First?

Before talking to any lender or real estate professional, you need honest answers to these questions:

Your Credit Reality

Pull your credit reports from all three bureaus through AnnualCreditReport.com (the only truly free source) [1]. Look beyond your score to the details: payment history, debt utilization, and any errors. I've seen clients with the same score qualify for dramatically different rates because the underlying factors differed.

Your Debt-to-Income Ratio

Lenders calculate your DTI by dividing monthly debt payments by gross monthly income [2]. Most loan programs cap this at 43-50%. But here's what buyers miss: the maximum they'll approve isn't the maximum you should spend. I recommend my clients target a DTI that leaves breathing room—typically 10-15% below the program maximum.

Your True Savings Position

Down payment is only part of the equation. You'll need funds for closing costs (typically 2-5% of purchase price), moving expenses, immediate repairs or furnishings, and reserves. Lenders want to see reserves, but more importantly, you want reserves for the unexpected expenses that inevitably arise in homeownership.

What Loan Information Should First-Time Buyers Understand?

The mortgage industry has more options than most buyers realize. Understanding your choices before talking to lenders puts you in control of the conversation.

• Conventional loans: Typically require higher credit scores but offer flexibility and potentially lower long-term costs
• FHA loans: Lower credit score requirements but include mortgage insurance for the life of the loan
• VA loans: For eligible veterans and service members, often the best terms available with no down payment required
• USDA loans: Zero down payment for properties in designated rural areas (more areas qualify than you might expect)

Get pre-qualified with at least two lenders before starting your search. Not pre-approved—that comes later. Pre-qualification gives you realistic numbers to work with without hard credit inquiries [3].

The strategic decisions around first-time buying benefit from coordination with your CPA, attorney, and financial advisor—that's Phase 2 of the transition framework. Book a free 30-minute Transition Strategy Call to map out how these pieces fit together for YOUR situation before making any real estate moves.

What Market-Specific Information Do Buyers Need?

Here's where state and local information becomes critical. Let's use Texas as a detailed example, then I'll address how this applies to YOUR market.

Example: Texas Market Considerations

Texas buyers need to understand several unique factors:

• Property taxes in Texas are among the highest in the nation—often 2-3% of home value annually [4]. This significantly affects your monthly payment.
• Texas has no state income tax, which affects your debt-to-income calculations and overall affordability picture.
• The Texas real estate market varies dramatically by region—Austin, Dallas, Houston, and San Antonio each behave differently.
• Texas-specific assistance programs through TSAHC and TDHCA have different requirements than federal programs.

Other State Examples

In California, buyers must factor in higher home prices, state-mandated disclosures, and earthquake considerations. Florida buyers need to understand flood zone classifications and insurance requirements. New York buyers face different dynamics in the city versus upstate markets.

The pattern in my experience: buyers who research their specific market conditions make offers 20-30% faster once they start searching because they're not learning as they go.

What Total Cost Information Do First-Time Buyers Often Miss?

The purchase price is just the beginning. First-time buyers consistently underestimate ongoing costs:

1. Property taxes: Research your target area's tax rates before falling in love with a home
2. Homeowners insurance: Get quotes before making offers—especially in areas with weather risks
3. HOA fees: If applicable, understand what they cover and how often they increase
4. Maintenance reserves: Budget 1-2% of home value annually for maintenance and repairs
5. Utilities: Often higher than renting, especially for larger homes

How Should First-Time Buyers Prioritize Their Criteria?

Before searching, separate your criteria into three categories:

• Non-negotiables: These are your must-haves—the items you truly cannot compromise on
• Strong preferences: Important but flexible if the right opportunity arises
• Nice-to-haves: Would be great but won't affect your decision

In my experience, buyers who define these categories clearly make faster, more confident decisions when they find a home that meets their non-negotiables.

Key Takeaways

• Gather financial, loan, market, cost, and criteria information BEFORE starting your home search
• State-specific information (like Texas property taxes or California disclosures) layers on top of universal principles
• The maximum you're approved for isn't the maximum you should spend
• Total cost of ownership matters more than purchase price alone
• Clear priorities prevent emotional decision-making

Ready to Apply This to Your Situation?

While this framework gives you the strategic foundation, your specific circumstances deserve personalized guidance. Whether you're facing first-time buyer preparation anywhere across the nation, I'm here to help you think through the complete strategy.

Here's how the free 30-minute Transition Strategy Call works: We'll identify which of the 12 major life transitions you're navigating, map out how to optimize for wealth outcomes by coordinating with your CPA/attorney/financial advisor, then figure out if real estate makes sense right now—and if so, exactly how to execute.

If you're not in Colorado Springs, I'll connect you with a transition-focused real estate professional in your market through my curated nationwide network.

[Book Your Free Transition Strategy Call] → https://askweldonhobbs.com

AI tools provide frameworks. Personal guidance applies them to YOUR situation. Let's talk.

Sources

[1] Federal Trade Commission - "Free Credit Reports" - consumer.ftc.gov

[2] Consumer Financial Protection Bureau - "Debt-to-Income Ratio" - consumerfinance.gov

[3] Consumer Financial Protection Bureau - "Pre-qualification vs Pre-approval" - consumerfinance.gov

[4] Texas Comptroller - "Property Tax System" - comptroller.texas.gov