How to Prepare Financially to Buy a Home in Austin

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How do you prepare financially to buy a home in Austin, Texas—especially when prices feel high, rates fluctuate, and your budget feels tight?

You’re not alone in asking that. In today’s slower market, many would-be homebuyers across Austin are dealing with affordability concerns, higher costs of living, and economic uncertainty. But with the right plan, buying a home in Austin, Texas, is still possible—and Brandon Holley and the team at Holley Homes Realty are here to walk you through it step by step.

Whether you’re a first-time buyer or returning to the market after a pause, this guide will help you financially prepare to make one of the most important investments of your life.

The Current Reality: The Austin Housing Market Has Changed

Before we talk strategy, let’s address what’s happening in the Austin, Texas real estate market:

• Home prices have softened from 2021-2022 peaks, but affordability remains a challenge.
• Tariffs and inflation have increased costs on construction materials, appliances, and renovation projects.
• Interest rates are still higher than recent historic lows, directly impacting monthly payments.
• Buyers have more power now that the market has cooled—but only if they're financially ready to act.

This slower market isn’t a bad thing—it’s a window of opportunity. And with the right financial preparation, you can take full advantage.

Step 1: Know Your Numbers Before You Search

A beautiful listing in South Austin means nothing if the numbers don’t work. That’s why step one is getting clear on your budget.

Key things to calculate:

• Monthly comfort zone: What can you realistically afford each month, including mortgage, property taxes, insurance, and HOA dues?
• Total cash on hand: This includes your down payment, closing costs, inspections, and moving expenses.
• Emergency reserves: Make sure you’re not draining your savings to buy. You’ll want a cushion post-purchase.

Holley Homes Realty works with trusted lenders who can help you break down these numbers in detail—not just give you a pre-approval letter and walk away.

Step 2: Improve Your Credit (Even a Little Helps)

Your credit score directly affects your interest rate, which impacts your long-term affordability.

Smart credit tips:

1. Pay all bills on time, every time
2. Keep balances below 30% of your available credit
3. Don’t open or close any new lines of credit before applying
4. Dispute any errors on your credit report

Need help getting your score above 600 (for renting) or ideally over 675 (to buy)? Ask Brandon Holley for a list of local credit improvement pros who specialize in homebuyer prep.

Step 3: Understand All Costs of Buying in Austin

It’s not just about your down payment. Buying a home in Austin, Texas includes:

1. Earnest money (usually 1% of the purchase price)
2. Option fee (usually $100-500 for your inspection period)
3. Inspection costs ($400-800, depending on home size)
4. Appraisal fee (typically $500-700)
5. Closing costs (2-4% of the purchase price)
6. Prepaids (insurance, taxes, HOA dues)

And that’s before moving trucks, furniture, or yard tools. Our team at Holley Homes Realty will walk you through every dollar so nothing catches you off guard.

Step 4: Explore Down Payment Options

You do NOT need 20% down. In fact, many buyers in Austin put down far less:

• FHA Loans: 3.5% down
• VA Loans: 0% down (for eligible veterans)
• Conventional Loans: As low as 3% with good credit
• Texas-specific programs: Down payment assistance for qualified first-time buyers

We’ll connect you with lenders who specialize in helping Austin-area homebuyers access these programs and close with confidence.

Step 5: Factor in Property Taxes and MUD/HOA Fees

In Texas, property taxes can vary wildly depending on where you buy.

• Travis County vs. Hays County vs. Williamson County all have different rates.
• Newer communities often have MUD taxes that fund infrastructure.
• Most master-planned communities include HOA dues that add to monthly costs.

These aren’t hidden costs, but they are often overlooked by buyers until it’s too late. Holley Homes Realty ensures you know the full picture before you write an offer.

Step 6: Build in Flexibility for a Slower Market

In today’s environment, it pays to be patient and opportunistic. Sellers are more open to negotiation. Builders are offering bigger incentives. But timing matters.

• Be ready to move on a deal when it appears
• Understand your must-haves vs. your nice-to-haves
• Consider areas slightly outside city limits (like Buda, Kyle, or Liberty Hill) for better value

You don’t need to rush. You need to be ready—and that’s what we help with.

Step 7: Get Pre-Approved With a Local Lender

Online mortgage calculators are fine for curiosity. But if you’re serious about buying, pre-approval from a local lender carries more weight.

Why local matters:

• Faster communication with your Realtor
• Accurate estimates of Austin-area taxes and insurance
• Stronger reputation with listing agents (which helps in negotiations)

Brandon Holley works with top-performing local lenders who understand the current Central Texas landscape and can get your deal done smoothly.

Step 8: Talk to a Realtor Early (Not Last)

Many buyers think they should wait until they’re “financially ready” before calling a real estate agent. That’s actually backwards.

A great Realtor will:

1. Help you build your plan months in advance
2. Connect you with the right lenders and credit experts
3. Set realistic expectations for your price point and area
4. Be your sounding board throughout the entire journey

Holley Homes Realty isn’t here to push you into a home—we’re here to help you make a smart, confident move when the time is right.

Buying a Home in Austin, Texas Starts With Preparation

The Austin market is still competitive, but it’s no longer a race. Buyers who plan ahead are the ones getting the best deals and making the most confident decisions.

If you’re thinking about buying a home in Austin, Texas, now is the time to start preparing financially. Reach out to Brandon Holley and the team at Holley Homes Realty for a pressure-free consultation. Whether you're 3 months out or a year away, we’ll help you get your game plan dialed in.

Call/Text Brandon directly at 512.487.9242