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House Hunting Houston

How Much Do You Need to Buy a House in Houston, Texas?

With Houston being one of the most populated cities in the US, buying a home in the Space City is a worthy investment. I’ve certainly wondered myself how much a home would go for in Houston.

Based on the home value of 200,000 in Houston at 3% down, You would need roughly as little as $13,600 to cover down payment, closing costs, and appraisal.

The figures above are an estimate and you should consult with a licensed professional first. For many first-time home buyers, there is always the confusion of how much money they would need to buy a home. In the next section, I will give you an insight into how much money you will need to buy a house.

Cost of Buying a Home in Houston Texas

A recent report by the Houston Association of Realtors (HAR), shows that the median price of single-family homes in Houston is around $251,000. The amount of money you may need when buying a house in Houston is categorized by the following home-buying expenses.

Downpayment

The downpayment is the major cost you will need to come out of pocket for. For example, if you’re buying a house of $200,000 using an FHA loan which requires you to put down 3.5% and have a minimum credit score of 580.

You are likely to put forward at least $7000. Your downpayment can’t be rolled into the loan because you must pay for it upfront. Most lenders do not require that you put down 20% (even for conventional loans) when buying a house.

You may decide to put forward 20% and above if you want to avoid the payment of monthly mortgage insurance (PMI). Also, there are several downpayment assistance programs like the Houston NeighborhoodLIFT that can help you afford your down payment.

Home Appraisal

This required by lenders to make sure that the purchase price or loan amount doesn’t exceed the market value of the home.

On average, the cost of property appraisal in Houston for single-family ranges from $300 to $600 and may require up to two hours of property inspections. The size of your proposed home and inspection requirements may impact the overall cost.

Closing Costs

In Houston, the average closing costs in Houston are roughly about $4000 on a $200,000 house.

Closing costs are fees charged by lenders that include several items wrapped into one. Your closing cost may be rolled into the mortgage loan depending on the type of mortgage program. A typical closing cost comprises of several fees such as;

  • Loan Origination fee
  • Credit Report fee
  • Title history check
  • Owners Title Insurance
  • Attorney fee
  • Underwriting fee
  • Home Inspection fee

Below is a breakdown of how much you may need to buy a house in Houston based on the above-listed figures and findings. Remember that your closing cost is usually 2%-5% of the purchase price.

Here are some examples of estimates how much you need to buy a house in Houston TX:

 1800 Sq. Ft Home2500 Sq. Ft Home4000 Sq. Ft Home
Purchase Price$200,000$350,000$500,000
Loan ProgramFHA (3.5%)FHA (3.5%)FHA (3.5%)
Down Payment$7,000$12,500$17,500
Home Appraisal$400$400$600
Closing Cost (3% of Purchase Price)$6,000$10,500$20,000
TOTAL COST$13,600$23,400$38,100

Based on our above calculations, this is how much money you’ll need to purchase the home but does not include money you should have saved up in case of emergencies.

Remember that this figure is not set in stone and may be subject to change.

Best Areas to Buy a Home in Houston Texas

The Woodlands

The Woodlands is a master-planned community located in the northwest area of Houston. With a population of 109, 843, it is one of the most sought-after neighborhoods because of its proximity to Houston hotspots.

It is very close to Downtown Houston and the George Bush Airport. In terms of real estate, the Woodlands features a wide variety of modern and luxurious homes at affordable prices. The median sale price of homes is $474,995.

It also features amenities such as the Woodland malls, waterway districts, parks, schools, golf courses, and upscale restaurants.

Sugar Land

Sugar Land over the last few decades has transformed into an affluent residential area with over 118,498 residents. Ranked 3rd in CNN list of “100 best cities to live in the US”, Sugar Land is one of the fastest-growing area in Houston.

One of its major selling points is being home to some of Texas biggest employers like Schlumberger, Tramontina, and CVR Energy. Increasing migration and development to the area, has led to the rise in the price of homes and lands.

The median price of home per square foot in Sugar land is around $132. This master-planned community boast of excellent schools, parks, retail centers, lakes, and tons of outdoor facilities.

Downtown

Downtown is not only one of the fastest growing areas in Houston, it is the largest business district in the space city. Located near the center of the Houston metropolitan area, it is currently home to over 13,204 residents.

Being home to nine fortune 500 companies and entertainment centers, Downtown is one of Houston’s hotspot for art and entertainment.

With the median income of residents around $67,043, home prices are affordable with easy access to a variety of real estate. The average price of rent is $1,979. If you’d love to live in a busy area with urban vibes, then Downtown Houston is a great place to buy your home.

River Oaks

From modern architectural designs, tastefully designed lawns to exquisite outdoor lifestyle, River Oaks is the crème de la crème of the Houston city. Located within the center of the Houston area, this exclusive neighborhood sits on over 1100 acres of green land.

It is also home to several high-end art galleries, boutiques, upscale restaurants, and retail centers. In terms of real estate, River Oaks plays host to some of the most expensive homes with prices ranging from $1,000,000 to over $20,000,000.

The median price of homes per square foot in River Oaks Area is $447. In addition, the average size of homes per square feet in the exclusive River Oaks neighborhood is around 4,596 sq ft.

Are you Ready to Buy a Home in Houston?

Your downpayment and the type of mortgage program you opt for will play a huge role in determining how much money you will need for your home purchase.

Most importantly, consult with your mortgage officer to determine your downpayment and the mortgage payment you can afford.

By Lah

My vision in the mortgage industry is to NOT be just another application emailed to any borrowers. I want my clients to know I'm here for them even after they get approved for their home loan.

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