Texas mortgage requirements differ depending on the kind of loan that you apply for. If you have excellent credit, a conventional loan may be for you. If you are in the 580 credit score range, then applying for an FHA loan may be in your alley. Then there are the USDA loans in Texas with low fixed interest rates, especially for those with a high credit score of 640. Veterans, or their surviving spouses, can take advantage of a no-down payment and lower rates offered by VA loans.
Texas mortgage requirements for Conventional loans
Conventional loans are favored by buyers with excellent credit. You only need a 3% minimum requirement for a down payment, which is why it is famous for buyers interested in owning a home in Texas. Lenders will look favorably at you if you don’t have significant negative credit issues like bankruptcies and foreclosures. This is especially true if you have a credit score of 620 with a 45% DTI or debt-to-income ratio.
Texas mortgage requirements for VA loans
There is no down payment requirement if you qualify for a VA loan in Texas! You don’t have to pay for mortgage insurance if you put in a down payment of at least 20%. VA loans usually have a lower closing cost than other mortgage loans. To know if you qualify, request a Certificate of Eligibility (COE), as it will show your service history and duty status, then submit it to the mortgage officer.
Texas mortgage requirements for FHA loans
With a credit score of 580 and a low down payment requirement of 3.5%, FHA loans have always been at the top of the choices for borrowers. If you are worried that you might not have a chance of getting approved because you have a 57% DTI when it comes to FHA loans, that is still the acceptable ceiling, but of course, the lower your DTI, the better chances you will have been getting approved. It would still be best to start repaying debts on time and lowering your DTI.
Texas mortgage requirements for USDA loans
USDA loans are not as popular as the other kinds of loans, but it offers a great deal for borrowers. It has a low fixed interest rate, no down payment requirement, and flexible qualifying guidelines. What probably makes it less popular is the slightly higher credit score requirement of 640.
Let us know if we can help you complete your Texas mortgage requirements.