Things Every New Homeowner in Texas Needs to Know
Buying your first home is an exciting milestone, but once the excitement wears off, there’s a lot to consider in order to make sure you’re on the right track. From property taxes to homeowners’ insurance, there are some key things you need to know to help you navigate your new life as a homeowner in Texas.
Here’s a guide to some general things every new homeowner in Texas should know:
1. Understand Your Property Taxes
Texas is known for its property taxes, which are a significant part of your annual expenses. Unlike many other states, Texas doesn’t have a state income tax, so the local governments make up for it through property taxes. These taxes can vary by county, city, and school district, but they typically range from about 1.8% to 3.5% of the appraised value of your property.
What to Know:
- Appraisal: Every year, your home’s value is appraised by the local appraisal district. If you think the appraisal is too high, you can file an appeal. For more info access your local county’s appraisal district or tax assessor-collector
- Exemptions: Texas offers various exemptions that can lower the taxable value of your property, including homestead exemptions for primary residences and exemptions for seniors or disabled individuals. Make sure to apply for any exemptions you qualify for to lower your tax bill.
- Payment Schedule: Property taxes are typically due at the end of the year, but you may want to set aside money throughout the year to avoid being surprised by a large bill. If your taxes are escrowed, these will be paid by the mortgage service provider every year.
2. Homeowners’ Insurance is a Must
Homeowners’ insurance is not just a good idea—it’s often required by your lender when you finance your home. It protects you from damage due to events like fire, storm damage, theft, and more.
What to Know:
- Coverage: Make sure your insurance covers the full replacement cost of your home, especially if you’re in an area prone to hurricanes or other natural disasters. Check for coverage related to water damage, flood insurance (which is separate), and personal property protection.
- Shop Around: Insurance rates can vary widely between providers, so it’s important to compare policies and prices before choosing the best option for you. Please note that you can always shop around, even if you policy has not expired. If your insurance is being paid by your escrow, please make sure to notify them on the change if you choose to go with another company.
3. Be Prepared for Maintenance Costs
Owning a home means you are responsible for repairs and maintenance—everything from fixing a leaking roof to changing the air filters in your HVAC system.
What to Know:
- Maintenance Budget: It’s wise to set aside around 1% of your home’s value each year for maintenance. For example, if your home is worth $250,000, aim to save about $2,500 per year for maintenance costs.
- Seasonal Maintenance: Certain tasks should be done seasonally—cleaning gutters in the fall, winterizing pipes in the winter, and servicing your AC in the spring.
4. Know Your HOA Rules (If Applicable)
If your new home is in a neighborhood with a Homeowners’ Association (HOA), it’s important to familiarize yourself with the HOA’s rules and fees. HOAs can impose restrictions on everything from fencing and landscaping to paint colors and pet rules.
What to Know:
- HOA Fees: These fees can be significant, so make sure you factor them into your monthly budget. Fees can cover things like community maintenance, landscaping, and security. Please note that your escrow will not pay for your HOA fees. These fees are billed separately and you will be responsible for paying them by the due date.
- Rules and Restrictions: Make sure you understand the HOA’s rules before making changes to your property. Violating the rules could lead to fines or other consequences.
5. Budget for Utilities and Other Recurring Costs
Along with your mortgage, you’ll have a variety of recurring monthly costs such as utilities, internet, and other services.
What to Know:
- Utility Costs: Utilities in Texas, especially electricity, can be higher than in other states due to the hot summers. Many new homeowners are surprised by their summer utility bills, which can increase significantly when using air conditioning. Consider installing energy-efficient appliances or insulation to lower your costs.
- Water Usage: In some parts of Texas, especially in drought-prone areas, water is a precious resource. Be mindful of your water usage to help conserve and keep bills lower.
6. Learn About Texas Property Tax Deferrals
Texas offers property tax deferral programs that can benefit seniors (65 and older) and disabled homeowners. Under this program, eligible homeowners can defer the payment of property taxes until they sell the home, move out, or pass away. This is not the same as an exemption, but it can offer relief for homeowners on a fixed income.
What to Know:
- Eligibility: Homeowners aged 65+ or those with a disability can qualify for the deferral. The taxes still accrue interest, but the payments are postponed.
- Refinancing Considerations: If you refinance your home while on the deferral, you’ll need to communicate with your lender about the status of your deferred taxes. Some lenders will not approve this deferral and might make you pay the balance during the refinance process.
7. Know Your Property Boundaries and Easements
It’s crucial to understand where your property lines are and whether any easements or encroachments affect your property.
What to Know:
- Property Survey: If you didn’t receive a survey during your purchase, consider getting one to understand exactly where your property ends.
- Easements: Easements allow others to use part of your land for things like utility lines or roads. It’s important to understand any easements on your property to avoid future disputes.
8. Understand Your Rights as a Homeowner
In Texas, homeowners have certain rights and responsibilities when it comes to property disputes, evictions, and neighbor issues.
What to Know:
- Right to Quiet Enjoyment: As a homeowner, you have the right to enjoy your property peacefully, without unreasonable interference from neighbors or the government.
- Property Disputes: If you find yourself in a property dispute—whether it’s over fences, trees, or easements—make sure to consult a Texas real estate lawyer or a mediator to resolve the situation.
9. Get to Know Your Neighborhood and Community
Finally, take the time to explore your neighborhood. Meeting neighbors and getting involved in community activities can make your new home feel like a true home.
What to Know:
- Local Services: Familiarize yourself with the local services such as schools, grocery stores, parks, and emergency services.
- Community Events: Many Texas communities offer festivals, farmers’ markets, and neighborhood gatherings—great opportunities to meet people and get involved.
Conclusion
Owning a home in Texas can be incredibly rewarding, but it comes with responsibilities. By staying on top of property taxes, understanding your insurance needs, maintaining your home, and learning about your rights as a homeowner, you’ll be better equipped to enjoy your new home without surprises. Take time to educate yourself, and don’t hesitate to reach out to local experts, whether it’s a real estate agent, attorney, or insurance broker, to make sure you’re fully prepared for the journey ahead. Happy homeownership!