Texas Mortgage Rates: Due to Texas’ propensity for having mortgage rates that are comparable to or below the national average, your monthly mortgage payments should be manageable. No counties in Texas have conforming loan ceilings over the $726,200 standard ceiling. Keep reading about Texas Mortgage Rates!
Historical Texas Mortgage Rates
Fast Stats on Texas Mortgage Rates
- median price of a home: $237,400 (U.S. Census Bureau)
- Funding Ratio for Loans: 51.32% (CFPB)
- 64.1% of Americans own a home (St. Louis Fed)
- Homeownership costs on a monthly basis: $1,747 (U.S. Census Bureau)
A considerable mortgage market exists in Texas, the biggest state in the continental United States. Investing and financial planning, such as tax, retirement, and estate planning, are other areas where financial advisors may assist you in making sure you are setting yourself up for the future.
Texas Mortgage Rates Overview
Texas has a more streamlined mortgage application process than some other states. Consumer protections have been implemented by the state government to help stop foreclosure. The state did not start allowing home equity loans until 1997, as well. The laws governing Texas mortgages are still created with the intention of limiting the amount of risk a homeowner can assume.
The biggest illustration of this unique quality of the Texas mortgage market is the state’s legislative restriction on total mortgage debt on a home exceeding 80% of its market value. This means that you cannot accrue more debt, such as a second mortgage and a home equity loan, and end up paying much more than the value of your property, as several state residents did before the foreclosure crisis.
By multiplying the value of your home by 0.8, minus the balance you currently owe on it, you can determine the maximum home equity loan you are permitted to take out. The Texas mortgage market’s lenders are subject to restrictions set forth by Texas law. Rush loan jobs are not permitted, and fees and costs, for example, are limited to 3% of the loan principle. Even after the mortgage is closed, you have three days to change your mind and back out of the deal without incurring any fees.
Conforming and FHA Loan Limits by County
Texas is a non-recourse state, which is another distinctive aspect of the Texas mortgage industry. If you go through a foreclosure and owe your lender more than your home is worth, the lender cannot pursue you for the “deficiency,” or the difference between what you owe the bank and what the bank can currently sell your property for on the market.
Texas allows for both judicial and non-judicial foreclosures. If you have a typical mortgage contract, your lender would likely need to initiate judicial foreclosure in order to seize the property, which can be a drawn-out procedure. Instead, you can have a deed of trust, which gives the lender the right to carry out a “power of sale” foreclosure.
You give the lender the “power of sale” in your mortgage or deed of trust so they can sell the house to recuperate their losses if you can’t make your mortgage payments. Legal foreclosure takes substantially longer than this sale process, which is typically conducted by public auction. Yet, Texas law mandates that the bank provide debtors with ample notice—20 days—to make late payments before foreclosing. At a foreclosure auction in Texas, you can also bid on your own house.
30-Year Fixed Texas Mortgage Rates
Texas is no different from the majority of US homeowners who choose a fixed-rate, 30-year mortgage. 30-year fixed-rate mortgages often have higher interest rates than 15-year mortgages, but 15-year loans frequently have monthly payments that are prohibitively high for typical borrowers.
Texas Mortgage Rates: Jumbo Loan Rates
In general, the $726,200 conforming limit applies to mortgages in the United States. Any loan above that is referred to as a “non-conforming” or “big loan,” may have higher interest rates to make up for the added risk the bank is taking on by making the loan in the first place. There are higher conforming loan limitations in a few high-cost counties across the nation. Nevertheless, no counties in Texas have conforming loan limits for single-family homes that are higher than $726,200. Texas’ typical 30-year fixed jumbo loan rate is 5.84%.
Texas Mortgage Rates: ARM Loan Rates
Unlike fixed-rate loans, where the interest rate on your mortgage debt is fixed for the life of the loan, adjustable-rate mortgages have variable interest rates. It will probably rise, but the amount of the rise will be limited by the conditions of the loan. Although adjustable-rate mortgages carry a higher risk for borrowers, if you’re convinced you can sell the house before the low introductory rate expires, you might decide that it’s worthwhile to get one. Texas has a 7/1 ARM average rate of 5.43%. (Zillow, Jan. 2023).
Texas Mortgage Rates: Resources
The TDHCA offers two primary curriculum options. My First Texas House is the first one. Eligible candidates can get low-interest 30-year fixed-rate mortgages through My First Texas Home. A down payment or closing cost assistance of up to 5% of the home loan amount is offered.
A Mortgage Credit Certificate is the second perk that TDHCA provides. It’s an additional tax benefit that goes along with the mortgage interest tax deduction. You can combine or use either the low-interest mortgage loan from My First Texas House or the Texas Mortgage Credit Certificate. TDHCA assistance cannot be obtained for a vacation home or investment property.
Income restrictions (up to 115% of the region’s family income) and restrictions on the price at which qualified homes may be purchased are also in place (the limit varies by county). Rich Texans and others interested in purchasing homes ought to go elsewhere. For those who want to be eligible for TDHCA’s home-buying assistance, there are minimum credit-scissored maximum debt-to-income ratio restrictions.
You don’t actually receive a mortgage from TDHCA. Instead, they limit the fees that participating lenders in the state may charge you by working with them. You must attend homebuyer education classes if you are eligible and choose to participate, and you cannot rent the house you purchase through the program
Don’t automatically think you’re ineligible if your salary is a little higher. The TDHCA permits greater income and purchase price limits in some specified areas with historically low economic growth to encourage development. The table above contains a list of area restrictions. Links to information for federal government agencies and organization that takes the Homeownership Preservation Foundation is available on the TDHCA website.
Texas Mortgage Rates: Taxes
In order to receive a tax credit when filing their federal income taxes, qualified candidates can obtain a Texas Mortgage Credit Certificate. Your refund will be increased by the difference if you have more tax credits than you owe in taxes. You may still deduct your mortgage interest on your federal income tax return even if you are not eligible for a Texas Mortgage Credit Certificate.
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- IRS Free Tax File 2023
Texas does have property taxes, but it does not have a state income tax. Texas has the seventh-highest average effective property tax rate in the nation when compared to other states, at 1.69%. Texas does not have real estate transfer taxes, which are levied on the sale of real estate within a specific state, county, or municipality. Every time you decide to sell your home, there won’t be any additional taxes due.
Texas Mortgage Rates: Refinance
Your Texas mortgage is prepared for refinancing. After refinancing to a new mortgage, you can request to continue getting a Mortgage Credit Certificate if you currently receive one for your current mortgage. You must complete the “Refinance of MCC Loan Application” for the TDHCA Texas Mortgage Credit Certificate Program with information about your refinance, including the new loan amount and the remaining balance on your previous loan. The MCC credit will continue to be granted to you at the same rate as your initial credit if your application is approved.
You might be eligible for refinance assistance from Fannie Mae whether or not you qualify for a Texas MCC. Via the High Loan-to-Value Refinancing Option from Fannie Mae, you can apply for a refinance. HARP, short for Home Affordable Refinancing Program, is no longer in operation.