diff --git a/lib/server.js b/lib/server.js
index 81acde4..7d4e569 100644
--- a/lib/server.js
+++ b/lib/server.js
@@ -1243,6 +1243,9 @@ WalletService.prototype._checkTxAndEstimateFee = function(txp) {
 
   txp.estimateFee();
 
+  if (txp.getEstimatedSize() / 1000 > Defaults.MAX_TX_SIZE_IN_KB)
+    return Errors.TX_MAX_SIZE_EXCEEDED;
+
   try {
     var bitcoreTx = txp.getBitcoreTx();
     bitcoreError = bitcoreTx.getSerializationError(serializationOpts);
@@ -1337,8 +1340,6 @@ WalletService.prototype._selectTxInputs = function(txp, utxosToExclude, cb) {
         txp.setInputs(selected);
         bitcoreError = self._checkTxAndEstimateFee(txp);
         if (!bitcoreError) return cb();
-        if (txp.getEstimatedSize() / 1000 > Defaults.MAX_TX_SIZE_IN_KB)
-          return cb(Errors.TX_MAX_SIZE_EXCEEDED);
       }
       setTimeout(select, 0);
     };
@@ -1404,10 +1405,15 @@ WalletService.prototype._selectTxInputs2 = function(txp, utxosToExclude, cb) {
     var sizePerInput = txp.getEstimatedSizeForSingleInput();
     var feePerInput = sizePerInput * txp.feePerKb / 1000.;
 
-    var totalValueInUtxos = _.sum(utxos, 'satoshis') - baseTxpFee - (utxos.length * feePerInput);
+    var totalValueInUtxos = _.sum(utxos, 'satoshis');
+    var netValueInUtxos = totalValueInUtxos - baseTxpFee - (utxos.length * feePerInput);
     if (totalValueInUtxos < txpAmount) {
-      log.debug('Value in all utxos (' + formatAmount(totalValueInUtxos) + ') is inusufficient to cover for txp amount (' + formatAmount(txpAmount) + ')'); // TODO
-      return false;
+      log.debug('Total value in all utxos (' + formatAmount(totalValueInUtxos) + ') is insufficient to cover for txp amount (' + formatAmount(txpAmount) + ')'); // TODO
+      return Errors.INSUFFICIENT_FUNDS;
+    }
+    if (netValueInUtxos < txpAmount) {
+      log.debug('Value after fees in all utxos (' + formatAmount(netValueInUtxos) + ') is insufficient to cover for txp amount (' + formatAmount(txpAmount) + ')'); // TODO
+      return Errors.INSUFFICIENT_FUNDS_FOR_FEE;
     }
 
     var bigInputThreshold = txpAmount * Defaults.UTXO_SELECTION_MAX_SINGLE_UTXO_FACTOR + (baseTxpFee + feePerInput);
@@ -1427,6 +1433,7 @@ WalletService.prototype._selectTxInputs2 = function(txp, utxosToExclude, cb) {
 
     var total = 0;
     var selected = [];
+    var error;
 
     _.each(smallInputs, function(input, i) {
       log.debug('Input #' + i + ': ' + formatInputs(input));
@@ -1444,6 +1451,8 @@ WalletService.prototype._selectTxInputs2 = function(txp, utxosToExclude, cb) {
       var txpSize = baseTxpSize + selected.length * sizePerInput;
       var txpFee = baseTxpFee + selected.length * feePerInput;
 
+      log.debug('Tx size: ' + formatSize(txpSize) + ', Tx fee: ' + formatAmount(txpFee));
+
       var amountVsFeeRatio = txpFee / txpAmount;
       var singleInputFeeVsFeeRatio = txpFee / (baseTxpFee + feePerInput);
       var amountVsUtxoRatio = inputAmount / txpAmount;
@@ -1452,6 +1461,12 @@ WalletService.prototype._selectTxInputs2 = function(txp, utxosToExclude, cb) {
       log.debug('Single-input fee/Multi-input fee: ' + formatRatio(singleInputFeeVsFeeRatio) + ' (max: ' + formatRatio(Defaults.UTXO_SELECTION_MAX_FEE_VS_SINGLE_UTXO_FEE_FACTOR) + ')' + ' loses wrt single-input tx: ' + formatAmount((selected.length - 1) * feePerInput));
       log.debug('Tx amount/input amount:' + formatRatio(amountVsUtxoRatio) + ' (min: ' + formatRatio(Defaults.UTXO_SELECTION_MIN_TX_AMOUNT_VS_UTXO_FACTOR) + ')');
 
+      if (txpSize / 1000. > Defaults.MAX_TX_SIZE_IN_KB) {
+        log.debug('Breaking because tx size (' + formatSize(txpSize) + ') is too big (max: ' + formatSize(Defaults.MAX_TX_SIZE_IN_KB * 1000.) + ')'); // TODO
+        error = Errors.TX_MAX_SIZE_EXCEEDED;
+        return false;
+      }
+
       if (!_.isEmpty(bigInputs)) {
         if ((amountVsFeeRatio > Defaults.UTXO_SELECTION_MAX_TX_AMOUNT_VS_FEE_FACTOR &&
           singleInputFeeVsFeeRatio > Defaults.UTXO_SELECTION_MAX_FEE_VS_SINGLE_UTXO_FEE_FACTOR)) {
@@ -1463,12 +1478,6 @@ WalletService.prototype._selectTxInputs2 = function(txp, utxosToExclude, cb) {
           log.debug('Breaking because utxo is too small compared to tx amount');
           return false;
         }
-
-        if (txpSize / 1000. > Defaults.MAX_TX_SIZE_IN_KB) {
-          log.debug('Breaking because tx size is too big (' + formatSize(txpSize) + ')'); // TODO
-
-          return false;
-        }
       }
 
       total += inputAmount;
@@ -1489,11 +1498,9 @@ WalletService.prototype._selectTxInputs2 = function(txp, utxosToExclude, cb) {
       }
     }
 
-    if (!_.isEmpty(selected)) {
-      var lockedOverhead = total - txpAmount;
-      log.debug('SUCCESS! Total locked: ' + formatAmount(total) + ', overhead: ' + formatAmount(lockedOverhead) + ' (' + formatRatio(lockedOverhead / txpAmount) + ')');
-    } else {
-      log.debug('Could not find enough funds within this utxso subset');
+    if (_.isEmpty(selected)) {
+      log.debug('Could not find enough funds within this utxo subset');
+      return error || Errors.INSUFFICIENT_FUNDS_FOR_FEE;
     }
 
     return selected;
@@ -1531,6 +1538,7 @@ WalletService.prototype._selectTxInputs2 = function(txp, utxosToExclude, cb) {
 
     var inputs = [];
     var groups = [6, 1, 0];
+    var error;
     var lastGroupLength;
     _.each(groups, function(group) {
       var candidateUtxos = _.filter(utxos, function(utxo) {
@@ -1549,20 +1557,25 @@ WalletService.prototype._selectTxInputs2 = function(txp, utxosToExclude, cb) {
 
       lastGroupLength = candidateUtxos.length;
 
-      inputs = select(candidateUtxos);
+      var result = select(candidateUtxos);
+      if (result && !_.isArray(result)) {
+        error = result;
+      } else {
+        inputs = result;
+        error = null;
+      }
 
       log.debug('Selected inputs from this group: ' + formatInputs(inputs));
 
       if (!_.isEmpty(inputs)) return false;
     });
 
-    if (_.isEmpty(inputs)) return cb(Errors.INSUFFICIENT_FUNDS_FOR_FEE);
+    if (error) return cb(error);
 
     txp.setInputs(inputs);
-    if (txp.getEstimatedSize() / 1000 > Defaults.MAX_TX_SIZE_IN_KB)
-      return cb(Errors.TX_MAX_SIZE_EXCEEDED);
 
     var err = self._checkTxAndEstimateFee(txp);
+
     if (!err) {
       log.debug('Successfully built transaction. Total fees: ', formatAmount(txp.fee));
     } else {
diff --git a/test/integration/server.js b/test/integration/server.js
index 2dded8c..507d10d 100644
--- a/test/integration/server.js
+++ b/test/integration/server.js
@@ -2132,6 +2132,7 @@ describe('Wallet service', function() {
       });
 
       it('should use unconfirmed utxos only when no more confirmed utxos are available', function(done) {
+        // log.level = 'debug';
         helpers.stubUtxos(server, wallet, [1.3, 'u0.5', 'u0.1', 1.2], function(utxos) {
           var txOpts = helpers.createSimpleProposalOpts('18PzpUFkFZE8zKWUPvfykkTxmB9oMR8qP7', 2.55, TestData.copayers[0].privKey_1H_0, {
             message: 'some message'
@@ -2354,10 +2355,11 @@ describe('Wallet service', function() {
       });
 
       it('should fail to create a tx exceeding max size in kb', function(done) {
+        log.level = 'debug';
+        var _oldDefault = Defaults.MAX_TX_SIZE_IN_KB;
+        Defaults.MAX_TX_SIZE_IN_KB = 1;
         helpers.stubUtxos(server, wallet, _.range(1, 10, 0), function() {
           var txOpts = helpers.createSimpleProposalOpts('18PzpUFkFZE8zKWUPvfykkTxmB9oMR8qP7', 8, TestData.copayers[0].privKey_1H_0);
-          var _oldDefault = Defaults.MAX_TX_SIZE_IN_KB;
-          Defaults.MAX_TX_SIZE_IN_KB = 1;
           server.createTxLegacy(txOpts, function(err, tx) {
             should.exist(err);
             err.code.should.equal('TX_MAX_SIZE_EXCEEDED');