How Much Cash Do You Need to Buy a Home in Dallas?

How much cash do I need for a $1 million house?

It depends on your down payment, your lender's fees, the property's taxes and insurance, and whether the seller pays any of your costs. There is no single number, but the pieces are always the same, and you can add them up with your lender for any house.

1. Down payment. On a $1,000,000 price, 10% down is $100,000, 20% is $200,000 and 30% is $300,000. Your loan program sets the minimum.
2. Earnest money and option fee. Paid to the title company within 3 days of the contract. Both are usually credited to you at closing, so they are part of your cash, not on top of it, but you need them early.
3. Closing costs. Lender fees, appraisal, the lender's title policy, escrow and recording fees.
4. Prepaid items. The first year of homeowners insurance, prepaid interest and the starting balance of your escrow account for taxes and insurance.
5. Inspections. Paid during the option period, before closing.
6. Reserves. Money left in the bank after closing. Lenders may require a set number of months of payments, and you will want a cushion for the first repairs.

How much down payment do I need to buy in Dallas?

Most buyers need between 0% and 5% down at minimum, depending on the loan. The program sets the floor, and you can always put down more.

• Conventional: 3% for many first-time buyers, 5% for most primary homes.
• FHA: 3.5% with a credit score of 580 or higher, or 10% with a score from 500 to 579.
• VA: 0% for eligible veterans and service members.
• Jumbo, for a loan above the conforming limit: set by the lender, usually more than a conventional loan.

Twenty percent down is not required anywhere in Texas. It matters for one reason on a conventional loan: at 20% you skip private mortgage insurance. Below that, you pay PMI monthly until you build enough equity to remove it. FHA loans carry their own mortgage insurance regardless of the down payment.

Can I buy a home with only 5% down?

Yes, with a conventional loan you can buy a primary home with 5% down, and some buyers qualify with 3%. The trade-offs are a larger loan, PMI and less equity if you sell soon.

The question to ask is not only "can I" but "what do I keep." A buyer who puts 5% down and keeps a solid reserve is often in better shape than one who empties every account to reach 20%. Your lender can show both versions of the same house so you can compare the payment and the cash left over.

On a higher price, check the loan amount against the conforming limit. For a one-unit home in Dallas County, the 2026 conforming loan limit set by the Federal Housing Finance Agency is $832,750. A loan above that is a jumbo loan, with stricter rules.

PMI on a conventional loan is not permanent. Under the federal Homeowners Protection Act, you can ask to cancel it once your loan balance reaches 80% of the home's original value, and it ends automatically at 78% if your payments are current. Ask your lender how they apply this, and whether a new appraisal can count rising value toward it.

What costs should I budget for besides the mortgage?

Budget for property taxes, homeowners insurance, mortgage insurance if any, HOA dues, utilities and upkeep. These go on every month after you move in, and some of them are paid ahead at closing.

• Property taxes: look up the home's current bill and appraisal history on DCAD. A new owner's taxes can change after the next appraisal.
• Homeowners insurance: get a quote on the specific house during the option period. Roof age and condition affect the price in North Texas.
• Flood insurance: check the address on the FEMA flood map. A lender requires it in a high-risk flood zone.
• HOA: dues, any special assessments and the transfer fees at closing, all listed in the resale certificate.
• Upkeep: older Dallas homes need regular foundation watering, roof and HVAC attention.

Can the seller help pay my closing costs?

Yes. You can ask the seller to pay part of your closing costs in the offer, and it becomes a fixed dollar amount in the contract. Each loan program caps how much a seller can contribute, so your lender should confirm the limit before you write the offer.

Whether a seller agrees depends on the home and the competition for it. There is more on offers on buying a home. A seller may prefer a credit to a lower price, because the price stays where they want it. For you, a credit lowers the cash you bring to closing. I look at both versions with buyers and pick the one that fits their cash position.

You can also lower costs by comparing lenders. Every lender must give you a Loan Estimate on the same standard form, so the fees line up side by side. Title insurance premiums in Texas are set by the Texas Department of Insurance and do not vary between title companies.

What taxes do buyers pay when purchasing a Texas home?

Buyers in Texas pay no transfer tax and no state income tax. The ongoing tax is property tax. The Texas Constitution prohibits a tax on the transfer of a home by deed, so the only government charges at closing are small county recording fees.

Property taxes in Texas are paid after the year ends. At closing, the seller credits you for the part of the year they owned the home, and you pay the whole year's bill when it comes due. Your lender usually collects a monthly amount in escrow for this. After you move in, apply for your homestead exemption with DCAD. It lowers the taxable value of your principal residence. A CPA can tell you how the purchase affects your federal taxes.