The process of buying a home can seem overwhelming and confusing, but did you know that it’s easy to break the mortgage process into a few simple steps?
When you’re ready to make your home in Texas, start with our guide on how to buy a house in Texas to make the process a little easier.
Step 1: Consider Current Texas Mortgage Rates
The best mortgage lender works with your income and financial situation. Ensure a smaller mortgage by applying for a loan when interest rates are low.
Every mortgage payment includes 2 parts: a principal payment (repayment toward the amount of money you borrow) and interest. Average interest rates for mortgage loans can change over time. Your local housing supply, housing prices and the overall state of the economy and bond markets can influence interest rates. Keep tabs on current rates to lock into your mortgage at the perfect time.
Here’s a chart that estimates what you’ll pay for a mortgage loan in Texas today. We update this information regularly to ensure you get the most accurate information possible.
| Loan Type | Rate | APR |
|---|---|---|
| 30-year fixed | 6.375% | 6.49% |
| 15-year fixed | 5.625% | 5.812% |
| 7/1 ARM (adjustable rate) | N/A | N/A |
| 5/1 ARM (adjustable rate) | 6.573% | 7.273% |
Step 2: Pick a Mortgage Lender in Texas
There are multiple types of mortgage loans and not every lender offers every type of loan. Here are a few of our favorite lenders in Texas for 3 of the most common mortgage types.
- Online Service
1. Best Overall: Quicken Loans®
Quicken Loans is one of the largest mortgage lenders in the United States. It offers a wide range of products and nearly every type of loan.
Quicken Loans has become a top lender for first-time buyers thanks to the company’s intuitive preapproval application. You can complete it from a smartphone or tablet and most applicants receive a loan decision instantly.
If you aren’t sure which type of mortgage loan you need, check out Rocket Mortgage® by Quicken Loans®. The Rocket Mortgage platform includes calculators, articles and tools that can teach you more about loan options.
- Current Service Members
2. Best for Veterans: Veterans United
Veterans United is the country’s No. 1 provider of VA loans. A VA loan is a special type of loan for active members of the armed forces and veterans. Though Veterans United specializes in VA loans, the company also offers conventional mortgage solutions with a variety of term options.
Veterans United employs a full team that has served in each branch of the armed forces.
This means that the Veterans United team is fully qualified to help you get your proof of service and assist you in applying for your VA loan.
- Self-employed Borrowers
3. Best for Business Owners and Contractors: Luxury Mortgage
If you’re self-employed, you’re seen as a riskier candidate for a mortgage loan. Mortgage lenders need to know that your income will be consistent after they issue you a loan — which can be hard to prove if you don’t have a set salary.
Business owners and independent contractors can benefit from the Asset Qualifier loans offered by Luxury Mortgage. Instead of requiring years of tax returns or complicated profit and loss statements, Luxury Mortgage offers a flexible asset qualification standard that allows you to include business assets in your application. No income or employment verification is required and you can borrow up to $6 million with an Asset Qualifier loan.
Step 3: Find a House
After you apply for a mortgage loan, your lender will review your application and issue a decision. Many lenders now issue preapprovals instantly. It might take a few days to hear whether you’re self-employed.
Once you’re approved for a loan, you’ll receive a preapproval letter that details how much you’re approved to borrow. It’s now time to begin the house hunt.
Searching for houses no longer means driving around your neighborhood to spot “for sale” signs. Online real estate databases allow you to instantly compare and browse properties for sale. You can schedule a viewing with just a few clicks.
Many buyers choose to hire a real estate agent or realtor at this point to help with the buying process. Hiring an agent offers a number of benefits, including:
- Access to more listings: Agents have connections and access to listings that aren’t publicly available on sites like Zillow or Redfin. This means more homes to view and a greater chance you’ll find your perfect property.
- Assistance narrowing down your search: Even if you have very specific features you’re looking for in a home, it’s easy to get overwhelmed during your search. A real estate agent can help you choose properties to narrow your search.
- It might not cost you anything. Traditionally, the seller pays the agent’s commission from the home sale. This means there are very few drawbacks to working with an agent.
Whether you decide to work with an agent or on your own, it’s a good idea to define what you’re looking for in a property. Consider factors like location, commute, school districts and property taxes in addition to the physical look and size of the home.
Step 4: Make an Offer
After you find a home you want to buy, it’s time to submit an offer. Though you can create your offer letter yourself, it’s highly recommended you let your agent write and submit it on your behalf. Real estate agents are experts in your local area and can help you decide how much to offer. Your agent also knows how to write a legally binding offer letter.
From here, the ball is in the seller’s court. Your seller can respond to your offer in 1 of 3 ways:
- Accept it. If your seller accepts the offer, it means that he or she agrees to all of the terms in your offer, including your purchase price. An acceptance means that you can move into the closing process.
- Reject it. If your seller rejects the offer outright, it’s usually because your real estate market is hot. There are likely competing offers. If you really love the home, you might want to change your terms or price and submit another offer letter.
- Give a counteroffer. If your seller sends you a counteroffer, it means the seller is ready to negotiate. The counteroffer will include a new set of terms and sometimes a new price amenable to the seller. You can choose to accept the counteroffer, reject it or propose another counteroffer.
It’s normal for home sales to go through multiple rounds of counteroffers before each party agrees. Don’t be afraid to consult with your agent for advice on how to proceed if you receive a rejection or a counteroffer.
Step 5: Closing Time
Once you and your seller reach an agreement, it’s time to close on your loan and move into your new home. Most closing processes involve 3 steps:
- Appraisal: An appraisal is a professional evaluation that tells you about how much money your home is worth. Mortgage lenders require you to get an appraisal of the property you want to buy before you get a loan because they can’t loan more money than the home is worth.
- Inspection: During an inspection, an expert will visit your property and write a report on the conditions of your home’s systems and appliances. An inspection isn’t required to buy a home. Most buyers choose to get an inspection to confirm the true condition of the home.
- Underwriting: Your lender prepares your loan paperwork and verifies your financial information during underwriting. Most of this process takes place behind the scenes.
You’ll attend the closing meeting after all steps have been completed. During the closing meeting, you’ll sign on your new loan, pay closing costs and the down payment to receive the keys to your new home.
Buy a House in Texas
After you close, congratulations are in order — you’re officially a homeowner! Now you must pay your monthly mortgage payments on time and keep your homeowners insurance current.
Consider using a mortgage amortization calculator to estimate when you’ll pay off your loan and how your principal balance can change if you make extra payments. Keep communication open with your lender for the duration of your mortgage.
About Sarah Horvath
Sarah Horvath is a distinguished financial writer renowned for her expertise in mortgage content. With years of experience in the mortgage industry, Sarah offers invaluable insights into home financing, refinancing, and real estate trends. Her comprehensive understanding of mortgage products, coupled with her ability to simplify complex financial concepts, makes her a trusted resource for homebuyers and homeowners alike. Sarah’s dedication to providing accurate and actionable information empowers readers to navigate the mortgage process with confidence. Whether discussing mortgage rates, loan types, or tips for homeownership, Sarah’s writing is characterized by clarity, reliability, and a commitment to helping individuals achieve their homeownership goals.