40+ Google Reviews
How Do Mortgage Rates Work In Houston, Texas?
Renowned for its warm weather and diverse population, Texas stands as the second-most populous state in the country. Boasting a staggering influx of new residents, the Lone Star State experienced the highest population growth among all states in 2021, according to Census estimates.
But why?
There are many variables to consider – tech expansion, affordable housing, low taxes, and high-quality living.
Here at Texas United, we regularly analyze the latest mortgage rates in Houston. Discover how the needle moves and stay informed about the current lending environment. Whether you’re a first-time homebuyer or considering refinancing, it’s crucial to understand today’s mortgage rates to make informed decisions.
How Affordable Is Housing in Houston, Texas?
On the whole, Texas is an affordable state. But like any city – let alone the fourth most populated urban area in America – the prices go up. Use these factors to analyze how affordable housing is in Houston.
- Median Home Prices in Houston: What are the average home prices in Houston? Use listings and sales to understand the local market’s pricing trends.
- Average Monthly Mortgage Payments in Houston: The typical monthly mortgage payment for homeowners in Houston provides a snapshot of what people pay to live in the city.
- Affordability Factors to Consider in Houston: Income levels, job growth, and overall cost of living are economic variables when analyzing housing affordability.
Mortgage Rates Trends in Houston, Texas
Similar to the rest of America (and the world), mortgage rates have exploded over the last few years – and they continue to hold steady. According to Forbes, mortgage rates in Houston are hovering around 6.71% this summer.
The future is impossible to predict, but housing market forecasters expect mortgage rates to stay around their current marker. Some believe we’ll see lower rates later this year or next, but others think rates will continue to rise.
Factors Affecting Mortgages Rates in Houston, Texas
The variables affecting mortgage rates in Houston aren’t much different than in other cities. High-interest rates, low supply, and high inflation have created a complicated market that no one can properly predict.
- National Economic Conditions
- Supply and Demand of the Local Housing Market
- Borrower Profiles (Credit Scores, Financial Portfolios, and Loan-to-Value Ratios)
- Mortgage Types and Terms
How to Find the Best Mortgage Rate in Houston, Texas
To find the best mortgage rate in Houston, you must shop around. Maybe your first offer will be the best, but you never know. Get at least three different offers to compare. By taking this time, borrowers can save thousands and thousands of dollars over a loan’s lifetime.
Mortgage Options for Houston, Texas
When it comes to obtaining a mortgage in Texas, prospective homeowners have a range of options to consider.
Here are some of the main choices available:
- Texas Conventional Mortgages: Requires a minimum credit score 620 and a debt-to-income ratio of less than 45 percent. With a downpayment of less than 20 percent, you’ll need to purchase mortgage insurance.
- Texas FHA Loans: If your credit history disqualifies you from a conventional mortgage, all hope is not lost. You may secure a loan from the Federal Housing Administration (FHA). The opportunities range, but you can get FHA loans with credit as low as 500, which will require a higher down payment.
- Texas VA loans: Veterans or military active duty members may qualify for a Veteran Affairs loan. VA loans don’t require a down payment or mortgage insurance, but you may need to pay a funding fee, which ranges from 2.3 to 3.6 percent.
First-Time Homebuyer Programs in Houston, Texas
The State of Texas provides several programs tailored to support first-time homebuyers as they embark on their homeownership journey. Here are some notable programs designed to assist first-time homebuyers in the Lone Star State.
- My First Texas Home: Managed by the Texas Department of Housing and Community Affairs (TDHCA), the My First Texas Home program offers reduced monthly payments and small loans to assist with down payments and closing costs. These loans can be worth up to 5 percent of your mortgage amount.
- Homes Sweet Texas Home Loan Program: The Homes Sweet Texas Home Loan Program extends its benefits not only to first-time homebuyers but also to repeat buyers. It offers 30-year fixed-rate mortgages along with down payment assistance grants. The best part is these grants don’t require repayment. However, you must meet certain income limits.
- Homes for Texas Heroes Home Loan Program: Designed for police officers, veterans, teachers, corrections officers, and emergency medical services personnel, the Homes for Texas Heroes Home Loan Program provides similar benefits to the Homes Sweet Texas Home Loan Program.
- TSAHC Mortgage Credit Certificates: The Texas State Affordable Housing Corporation offers tax credits depending on how much you pay on your mortgage each year. In other words, you might be leaving money on the table.
Finding Optimal Mortgage Rates in Houston, Texas Requires Patience and Thoroughness
Home ownership doesn’t just happen. It requires intelligent financial planning, saving, and boldness. Even if you’ve analyzed every angle of every situation, it will still require a leap of faith. You’ll never know exactly when it makes sense to buy. Instead, follow the numbers, trust your gut, and make informed decisions. At Texas United, we provide our clients with the best options. Learn more today!