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 particularly attractive to new residents is its relatively low cost of living. There's no state income tax, and the median house prices are 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 within your budget.
Texas Mortgage Calculator: Choose a Mortgage Type
The first thing that homebuyers looking to move to Texas need to do is pick a type of mortgage. Each one has pros and cons. Here are the three most common ones.
- 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. If you have a credit score of 500, you can still get a loan so long as you have 10% down.
- Texas VA mortgage: Those presently or previously in the armed forces can get a VA-backed loan. These loans require nothing down and never have private mortgage insurance. If you are in the military, these loans 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 to make homeownership more affordable.
First-Time Homebuyers in Texas
The Texas State Affordable Housing Corporation offers multiple programs to help first-time homebuyers purchase a property. Here are the ones you need to know!
The Home Sweet Texas program provides a 30-year fixed-interest rate loan (there are several choices available). Additionally, this program offers forgivable 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 is very similar to the Home Sweet Texas one 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 allows you to receive 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 What Works for You
The Lone Star state has fantastic food, large and affordable homes, and is a beautiful place 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 what mortgage option works best for you!
