The median home price in Texas has risen significantly since 2011, according to real estate data provider Zillow. A low median value of $125,000 in early 2012 has since grown to $190,000 in late 2018.
Although still lagging behind the U.S. Census Bureau’s national median value calculation of $320,000, the long-term trend is clear. Navigating this increasingly expensive market means prospective homeowners need to pay close attention to Texas mortgage rates, terms, and conditions.
National factors such as regulations and economic performance affect the market, but so do state-level and local changes, such as foreclosure rates, regional lender competition, and much more. A strong understanding of current mortgage rates in Texas helps you find the best possible home loan for your needs.
The immense size of the state of Texas, the mix of urban, suburban and rural areas, significant population growth, range of climates and geography and other state-specific considerations all have an impact on home value.
To find the best mortgage possible for your needs, it’s critical to keep all of these elements in mind, then start searching for a variety of lenders that offer competitive rates and terms, whether you’re looking for a new home loan or to refinance a current mortgage. Keep reading to learn more.
Current Mortgage & Refinance Rates in Texas
5 Critical Elements That Affect Mortgage Rates & Refinance Rates in Texas
The more you know about mortgage rates in Texas, the easier it is to make an informed decision that best addresses your unique situation in terms of what’s needed to secure a loan and purchase a home. When you know how to obtain the most favorable rates and terms possible, you save money in the long run by paying less in interest. That can keep thousands of additional dollars in your pocket each year. You may also enjoy a variety of potential benefits, from lower down payment requirements to loans secured by a federal agency. This is why it’s so essential to research providers, rates, and terms, as well as carefully compare them to find the best option for your needs.
- Credit score: Your credit score affects a wide range of financial decisions, with one of the most important being the terms and conditions offered by lenders who offer you a home loan. Although each lender will have somewhat different criteria and a credit score is not the only factor considered by your mortgage provider, it’s an especially important one. The higher your credit score, the more likely you are to enjoy lower interest rates and other benefits because a stronger score indicates a more reliable, dependable borrower. Conversely, a lower score can lead to higher interest rates and other obstacles. The Consumer Financial Protection Bureau offers a detailed guide that can help you understand more about how a credit score is generated and what influences the final number reached.
- Type of loan: A mortgage is always a loan tied to a piece of real estate, but the exact nature of your home loan can vary greatly. Everything from the purpose of the loan, whether it’s for a new home or to refinance an existing mortgage, to the specific type can have a significant influence on the monthly payment, the interest rate, and much more. Eligibility for a variety of specialized loans offered by government agencies can have a significant impact on interest rates and monthly payments, so understanding their qualifications and benefits is vital. Even the traditional mortgage includes options that can fundamentally alter the nature of the agreement, like selecting a fixed or adjustable-rate and choosing the length of the loan term.
- Type of refinance: Refinancing helps current homeowners adjust their monthly payments, interest rates, and other crucial terms and conditions by entering into a new loan agreement that pays off the existing one. This option is a powerful one depending on current market conditions and what lenders are willing to offer. Understanding different types of refinancing helps homeowners choose the option that best aligns with their goals. Refinancing can help you change the loan’s term length, access the built-up equity in a home, and change between a fixed-rate and adjustable-rate mortgage, among other reasons. The Federal Reserve Board offers a lengthy guide to refinancing that helps homeowners understand the many details involved in the process.
- Length of refinance term: A refinanced mortgage can be drastically different from the home loan that was in place beforehand. One of the most transformative changes to consider is the length of the refinance term. Shorter terms help the lender by providing a shorter timeline to repayment, which often leads to lower interest rates for the borrower, but also a higher monthly payment. A longer term usually means higher interest rates and a larger total cost, but allows borrowers to spread out the total cost of the mortgage over a much more extended period.
- Down payment: A down payment can be very low, with certain government-sponsored programs open to specific demographics, or as high as a home buyer wants to set it. The golden standard of 20 percent for traditional mortgages is what many people have experience with, but there’s room for variation in many cases. A lower down payment reduces financial impact up front but often means higher monthly payments, while a sizeable down payment is a more substantial immediate obligation that reduces long-term liabilities. It’s possible to adjust a down payment somewhat to create the most effective balance for individual needs, although all borrowers need to work within the limits set by their lenders.
How to Get the Best Mortgage & Refinancing Rates in Texas
When it comes time to choose a lender and secure a mortgage, finding favorable rates and terms, as well as exploring the many forms of mortgages that may be available, help you make the best choice possible. With a little research, you may find you qualify for a USDA home loan for purchasing a house in a rural area or a Federal Housing Administration mortgage for first-time homebuyers. Even if you don’t fit into any of these special mortgage categories, you’ll still find differences between what your chosen lenders offer, and ultimately save money because of it. The only way to identify potential opportunities for savings is to explore the available options.
The CFPB said borrowers seeking out a 30-year, fixed-rate conventional home loan are offered interest rates that vary by as much as half a percent or more. That means tens of thousands of dollars in savings over the life of the loan, and the opportunity to pay off the principal earlier to further reduce liability. However, 47 percent of borrowers don’t compare lending options. Join the slim majority of comparative shoppers by finding the mortgage options that work best for you, and then reach out to several providers for quotes. Fill out online forms when possible, and make phone calls when that option isn’t available.
You should also pay close attention to the fees that are included when it’s time to finalize the mortgage. Specific charges, such as the city or country recording fee, are required by the relevant government agency and aren’t often negotiable. However, many of the other expenses involved in the process, from loan origination to document preparation and title search, can be reduced with a little negotiation.
Recommended Companies in Texas
The Lone Star State has several potential loan providers to consider. They include:
- Quicken Loans: As a loan marketplace, Quicken Loans connects borrowers and lenders across all 50 states. Its extensive network means it’s a convenient platform for potential and current homeowners to explore a variety of new mortgages and refinancing options. From traditional fixed- and adjustable-rate mortgages to VA, FHA, and USDA home loans, Quicken Loans can connect borrowers with lenders offering the most relevant options for their needs. It has the best overall rating of any lender or lending marketplace we’ve ranked, at 9.8/10, as well.
- LendingTree: LendingTree offers an accessible path to request quotes and move further along in the process with a variety of lenders through its online loan marketplace. LendingTree also has some powerful automation features. Entering information just once can connect borrowers with as many as five potential lenders, making comparisons and initial decisions that much easier.
- J.G. Wentworth: J.G. Wentworth’s direct lending features unusually low annual percentage rates for certain mortgage products, no hidden fees and a variety of channels to use to communicate with the lender, from email and live chat to phone calls. J.G. Wentworth also enjoys an A+ rating from the Better Business Bureau.
- Ally Bank: Ally Bank offers a fully online experience alongside competitive rates on some mortgage products, such as APRs under 5 percent for 30-year fixed-rate mortgages. Ally doesn’t have physical locations but makes up for it with easy, secure, and straightforward processes and all of the support that a bank can offer.