Refinance rates in Texas simplified

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Refinance rates in Texas have taken a sharp rise in 2022. While it may be true that mortgage rates are difficult to predict, the current national refinance rates in Texas are expected to be above the historical lows for some time. The high refinance rates are making it a tad challenging to buy a home.

Should you consider refinancing?

Interest rates may not be at their historic lows, but if you are considering renovating your home, you might want to do a cash-out refinance if this is necessary for the time being. Remember that the refinance rates in Texas may vary depending on the lender and the borrower’s credit score and creditworthiness. As of this writing, current rates in the area are 7.10% for a 30-year fixed mortgage and 6.25% for a 15-year fixed mortgage.

Are you looking for mortgage options in Texas?

Buying real estate in Texas is a popular choice, so if you have been shopping around to find the best refinance rates in Texas, there are mortgage options for you:

  1. Conventional mortgage. With a debt-to-income (DTI) of less than 45% and a credit score of at least 620, you can apply for a conventional mortgage in Texas. Additionally, if you can afford a 20% down payment for your mortgage, you don’t have to pay for private mortgage insurance (PMI).
  2. FHA Loans. Let us say that a conventional mortgage is out of the question because your credit score is in the 500 range, and you cannot afford a 20% down payment; FHA loans may be the answer. Because the loan is insured by the Federal Housing Administration (FHA), it offers lower interest rates and requires more relaxed requirements. If your credit score is at least 580, you can put in a 3.5% down payment, while a 500 credit score will require a 10% down payment. Even the DTI requirement is between 31-41%. FHA loans usually have lower interest rates as well.
  3. VA Loans. This kind of mortgage is backed by the Department of Veteran Affairs (VA) and is open for active duty military members, surviving spouses, and veterans. There is no down payment requirement for a VA loan, but you will need to pay a 2.3%-3.6% funding fee based on the purchase price. You will need a COE or Certificate of Eligibility to ensure that you qualify, and you can apply for it online.

If you are ready to discuss about refinance rates in Texas and other mortgage concerns, let us know how we can help you.