While homes in Fort Worth are more affordable than the average home nationwide, there are other costs and requirements of homeownership that can have an impact on your purchase. Here’s what you need to know if you are considering buying a home in Fort Worth.
Home seller and buyer laws
Real estate property disclosure forms: Home sellers in Texas must disclose what they know about the condition of their property. A disclosure form must be delivered before the purchase contract is considered valid. If sellers don’t provide a disclosure form, buyers can terminate the agreement and get their deposit back within seven days. Federally mandated lead-disclosure forms are also required. Depending on where the house is located and its systems, additional disclosure forms may also be required.
Judicial or non-judicial foreclosure state: If a homeowner defaults on their mortgage in Fort Worth, the process depends on the language in their mortgage paperwork. Unlike some states, where the process is either judicial — handled by the court system — or non-judicial, Texas law allows for either process depending on the mortgage agreement between a lender and borrower. If the mortgage has a “power of sale” clause, the process will follow the steps in that clause. If not, a judicial foreclosure can occur. Most often, a non-judicial foreclosure takes place, in which the homeowners have 20 days after receiving a notice of foreclosure to make payment arrangements or the property will be auctioned. If there’s a gap between the amount owed on the loan and the sale price in a foreclosure, lenders are allowed to demand payment of the deficiency. However, the amount of the deficiency is limited to the difference between the fair market value of the property when it’s sold and the balance owed.
Community property state or equitable distribution: Texas is one of nine community property states in the country, which generally means that property acquired during a marriage is considered owned by both spouses, regardless of the name on the title or who paid for it. This, of course, has an impact during a divorce, but buying a house in a community property state can also affect a mortgage application. When applying for government-guaranteed VA, FHA and USDA loans in Texas and other community property states, you’ll need to include the minimum debt payments of your spouse as part of the debt-to-income ratio, even if your spouse is not part of the loan application.
Attorney vs escrow state: While some buyers may want to hire a real estate attorney to help them navigate the homebuying process, closings in Texas are typically handled by a title agent or an escrow officer, according to the Texas Real Estate Commission. Title and escrow agents, licensed by the Texas Department of Insurance, research issues related to the transfer of your property and handle the closing. Certain complex situations may require the use of an attorney.
Texas is one of a handful of states that doesn’t impose real estate transfer taxes. However, a proposal to overhaul the state tax system includes the possibility of a real estate transfer tax. The majority of Texans oppose a property transfer tax, according to Texas REALTORS.
Small fees are imposed for recording property transactions by Tarrant County, where Fort Worth is the county seat. These include a $5 records management fee and similar fees for document copies.
On the other hand, property taxes can be high in Texas. Tarrant County, according to Tax-Rates.org, has among the highest property taxes in the nation, at an average of 2.37% of the assessed home value. The median annual property tax in the county is $3,193, based on the median home value of $134,900.
Some homeowners in Fort Worth are eligible for property tax exemptions. While exemptions that can reduce taxes for seniors, veterans and people with disabilities are typically set by the state or by local law, according to the National Association of Counties, property taxes are set locally. In Fort Worth, homeowners may apply for a homestead exemption through the Tarrant Appraisal District. A property tax deferral is also available if a homeowner’s assessed value rises by more than 5% over the previous year. Additional exemptions are available for seniors older than 65, people with disabilities, disabled veterans, surviving spouses of veterans and surviving spouses of first responders killed while on duty. Farmers and ranchers may also qualify for an alternate method of property tax appraisal.
You can find out more about property tax exemptions in Fort Worth here.
Conforming loan limits
For borrowers who choose a conforming, conventional loan, the maximum amount that can be borrowed for a one-unit property in Fort Worth is $484,350. A conforming loan meets the limit for loans that will be purchased by government-sponsored entities Fannie Mae and Freddie Mac. The loan limits are reviewed annually and may change based on market conditions.