Mortgage in Texas
They say everything is bigger in Texas, and that's certainly true when it comes to housing. Texas has the fifth largest average home size in the nation. What makes Texas especially attractive to new residents is its relatively low cost of living. There's no state income tax, and median house prices sit well below the national average. If you're looking to move to the Lone Star State, use our Texas mortgage calculator to see if a move fits your budget.
Mortgage Options in Texas
The first step for homebuyers moving to Texas is picking a mortgage type. Each one has pros and cons. Here are the three most common.
- Texas conventional mortgage: With property prices below the national average, conventional mortgages are popular. You can get a traditional mortgage with as little as 3% down and a credit score of 620. Please note that if you put less than 20% down, you will need private mortgage insurance.
- Texas FHA mortgage: FHA loans are also popular in Texas, thanks to the low housing costs. An FHA mortgage requires as little as 3.5% down and a minimum credit score of 580. With a credit score of 500, you can still get a loan as long as you put 10% down.
- Texas VA mortgage: Current and former members of the armed forces can get a VA-backed loan. These loans require nothing down and never carry private mortgage insurance. If you are in the military, they are often the best choice!
All Texans, both current and future, have access to these types of mortgages. For first-time homebuyers, Texas has a few programs that make homeownership more affordable.
First-Time Home Buyer Programs in Texas
The Texas State Affordable Housing Corporation offers multiple programs to help first-time homebuyers purchase a property. Here are the ones you should know!
The Home Sweet Texas program provides a 30-year fixed-interest rate loan (several choices are available). The program also offers down payment assistance in the form of a forgivable second lien loan. The maximum amount of aid is 5%, and the state will fully forgive it after three years.
Eligibility Criteria: Income and purchase price restrictions apply. Borrowers must use one of the participating lenders.
Homes for Texas Heroes Program
This program closely mirrors Home Sweet Texas but has occupational restrictions. You'll get a 30-year fixed-rate loan with up to 5% as a forgivable second mortgage.
Eligibility Criteria: The same restrictions apply for this as the Home Sweet Texas program. You also must be a public school teacher, corrections officer, EMS employee, firefighter, police officer, librarian, school counselor, school nurse, or associated with the military.
The mortgage credit certificate lets you claim a percentage of the mortgage interest you pay back on your taxes. This payment is a non-refundable tax credit.
Eligibility Criteria: First-time homebuyers who have one of the loans above can apply for this certificate.
Texas Mortgage Calculator: Find the Loan That Works for You
The Lone Star State has fantastic food, large and affordable homes, and beautiful places to raise a family. If you're thinking of moving to Texas, use our Texas mortgage calculator to see how much home you can afford and which mortgage option works best for you!
