Buying a home in Texas
According to Zillow, the typical home value in Texas is lower than the typical value of $320,662 across the US. The typical home value in Texas is $276,048, and home values have increased 21.6% over the past year.
Historic mortgage rates for Texas
By looking at the average mortgage rates in Texas since 2010, you can see trends for 30-year fixed mortgages, 15-year fixed mortgages, and 7/1 adjustable mortgages:
Seeing how today’s rates compare to historic Texas mortgage rates may help you decide whether you’d be getting a good deal by getting a mortgage or refinancing now.
Mortgage calculator
Use our free mortgage calculator to see how today’s mortgage rates would affect your monthly payments.
By clicking on “More details,” you’ll read about how to save money on your mortgage.
Texas first-time homebuyer programs
The Texas State Affordable Housing Corporation offers financial assistance if you get a mortgage through a participating lender. You may qualify for one of the following:
- Home for Texas Heroes Program: This program is for teachers, veterans, correction officers, police officers, firefighters, and emergency medical service workers in Texas. You can get down payment assistance for up to 5% of your mortgage amount.
- Home Sweet Texas Home Loan Program: If you earn a low-to-moderate income, you may qualify to borrow 5% of your mortgage amount for down payment assistance.
- Mortgage Credit Certificate: Claim a percentage of interest paid on your mortgage on your federal taxes each year. You can combine the MCC program with either the Home for Texas Heroes or Home Sweet Texas Home Loan programs.
Or you might be eligible for one of the following programs through the Texas Department of Housing and Community Affairs:
- My First Texas Home: Receive a loan of up to 5% of your mortgage amount for down payment and closing cost assistance. You must be a military veteran or first-time homebuyer.
- My Choice Texas Home: If you’re a veteran or repeat homebuyer, you can get a loan of up to 5% of your mortgage amount to help with closing and down payment costs.
- Texas Mortgage Credit Certificate Program: Claim either 20% or 30% of interest paid on your mortgage on your federal taxes, depending on your mortgage amount. You can claim up to $2,000 per year and combine this program with the My First Texas Home Program.
Or you may be eligible for one of these federal programs:
- Federal Housing Administration mortgage: You can get a down payment of 3.5% with a credit score of at least 580, or get a mortgage with a credit score between 500 and 580 with 10% down using this loan, which is also called an FHA loan.
- United States Department of Agriculture mortgage: These loans, also called USDA loans, can be useful if you are a low-to-moderate income borrower looking to buy a home in a rural or suburban area.
- Veterans Affairs mortgage: These mortgages, also called VA loans, are for active-service military members or veterans, or spouses of members who have died and can provide lower interest rates than conventional mortgages.
Refinancing your mortgage in Texas
Mortgage refinance rates are at all-time lows right now, so it could be a good idea to switch your current mortgage for one with a better interest rate — especially if the new rate would be significantly lower.
You may decide to refinance with the same lender that gave you your initial mortgage, but it’s not always the best idea. A different lender may offer you a better deal the second time around. Shop around for a company that will offer the best interest rate and charge relatively low fees.
How to get a low interest rate on your mortgage
Here are some tips for landing a good interest rate on your mortgage:
- Save for a down payment. With a conventional loan, you may be able to put down as little as 3%. But the higher your down payment, the lower your rate will likely be. Rates should stay low for a while, so you probably have time to save more.
- Increase your credit score. Many lenders require a minimum credit score of 620 to receive a mortgage. But the higher your score, the better your rate will be. To improve your credit score, be sure to pay all your bills on time. You can also pay down debts or let your credit age.
- Lower your debt-to-income ratio. Your DTI is the amount you pay toward debts each month, divided by your gross monthly income. Most lenders want to see a DTI of 36% or less, but an even lower DTI can result in a better rate. To improve your DTI, pay down debts or figure out whether you can earn more money.
- Choose a federally backed mortgage. If you’re eligible, you might consider a USDA loan (for low-to-moderate-income borrowers buying in a rural area), a VA loan (for military members and veterans), or an FHA loan (not designated for any particular group). These loans typically come with lower interest rates than conventional mortgages. As a bonus, you won’t need a down payment for USDA or VA loans.
Improving your financial situation and choosing the right type of mortgage for your needs can help you get the best interest rate possible.
Mortgage and refinance rates by state
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