Texas Conventional Home Loans

Conventional home mortgages in Texas, as in other parts of the United States, are loans that are not insured or guaranteed by the government. Instead, they conform to the loan limits and guidelines set by government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac. 

Texas Conventional loans have loan limits set by Fannie Mae and Freddie Mac.  These limits may change annually and can vary by the number of units in the property (e.g., single-family, duplex, etc.).  Texas borrowers looking to finance an amount above these limits might consider jumbo loans.  The down payment requirements for Texas conventional loans can vary based on factors such as credit score, loan amount, and other individual circumstances. Traditionally, a down payment of at least 5% to 20% is common, but first time buyers have lower down payment options, such as 3% down.  

Texas Conventional Mortgages generally have stricter credit score requirements compared to government-backed loans like FHA.  While specific requirements may vary, a higher credit score is often required to secure better interest rates and terms.

If the down payment is less than 20%, borrowers typically have to pay private mortgage insurance (PMI) until they reach a certain level of equity in the home. Once the loan-to-value ratio drops below 80%,  PMI can often be removed.

Texas Interest rates on conventional loans can be influenced by market conditions, the borrower’s creditworthiness, and other factors.   A borrower’s debt-to-income ratio to determine their ability to manage monthly payments.  Generally, a lower debt-to-income ratio is favorable for loan approval.

Texas Conventional loans typically require a property appraisal to ensure the home’s value aligns with the loan amount.  The appraisal helps protect both the lender and the borrower by ensuring a fair market value for the property.

Texas Conventional loans often offer various loan terms, including 30-year fixed-rate, 15-year fixed-rate, and adjustable-rate mortgages.  Borrowers can choose the term that best fits their financial goals.