Texas Mortgage Overview
Texas has always been a popular place to
live. It has a diverse culture, affordable housing, and incredible scenery and
weather. With the average housing prices around $172,000, it's easy to see why
28 million people live here.
If you're ready to buy a home in Texas,
here are your loan options.
Texas conventional loans
If you have great
credit, apply for a conventional loan. You need just a 660 credit score and a 3
- 5 percent down payment. Borrowers pay PMI with less than 20 percent down on
the home, but the rates are affordable. You can cancel PMI once you owe less
than 80 percent of the home's value. Conventional loans don't have hard
requirements, with a 36 - 40 percent debt ratio and stable income, you could
get some of today's best rates.
Texas FHA loans
If you can't get a conventional
loan, look at the FHA loan. You don't need perfect credit. Borrowers secure
loans with credit scores of 580 and 3.5 percent down or 500 - 579 and 10
percent down. Either way, you're on your way to owning your first home. FHA
loans have great rates. You pay mortgage insurance for the life of the loan,
but it's often worth it.
Texas VA loans
Military veterans can get 100
percent financing with a VA loan. The credit score requirements are low (620)
and the debt ratio requirement is as high as 50 percent. There is not any
mortgage insurance, but you will pay an upfront funding fee for the VA loan.
Texas USDA loans
USDA loans are for low to moderate-income
families who don't qualify for the above loans. USDA loans are for borrowers
with credit scores of at least 640 and a debt ratio of 41 percent or less. It's
a great program for first-time homebuyers or anyone who hasn't owned a home in
the last three years.
First-Time Homebuyer
Programs in Texas
My First Texas Home
This 30-year
low interest loan and up to 5 percent of the loan amount in down payment
assistance, you can buy your first home. You must meet the income guidelines
and have a minimum 620 credit score to qualify.
Tax Mortgage Credit Certificate Program
With
the MCC you get a dollar-for-dollar tax credit on mortgage interest paid for
the year for the life of your loan. You can deduct up to $2,000 per year which
puts more money in your pocket for homeownership costs.
Home for Texas Heroes
If you work in public
service, you may qualify for the Homes for Texas Heroes programs which provides
a 30-year fixed-rate mortgage and down payment assistance up to 5 percent of
the loan amount. Teachers, police officers, veterans, firefighters, and
corrections officers are among the eligible applicants. | 
