Texas Mortgage Lender

    Which Texas Mortgage Lender Should You Choose?

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    Texas is known for its thriving community, the fabled Southern hospitality, and lots of land, which makes the Lone Star State a great place to relocate or find your next home. Housing prices are reasonable, too – the median housing value in Texas is $252,422, a tad lower than the national median housing rate of $298,933. So if you’re looking for a home in Texas, now’s the best time to buy. 

    But unless you can pay cash for your dream property, shopping for a home often means shopping for a mortgage lender, too. Different lenders have different advantages – some lenders accept a lower down payment, promise lower interest rates, or have lower credit score requirements.

    Looking to move down south? Then this in-depth guide is for you. Keep reading to learn about the top 6 lenders in Texas as well as the essential criteria you should consider when choosing one.

    How To Choose A Mortgage Lender 

    Choosing and applying for home loans doesn’t have to be too complex. To help you along your journey to homeownership, we've compiled the best mortgage lenders in Texas. For this list, we considered the following key criteria: loan offerings, affordability, application process, customer service, and availability.

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    Mortgage Loan Types

    There are several mortgage types to choose from – which one to get depends on your specific circumstances. Let's take a look at the different kinds of home loans you'll come across:

    • Conventional loans: The most common of home loan types, a conventional loan is backed by a private lender instead of the federal government. You can buy a home with a down payment as low as 3% with a conventional loan if you pay private mortgage insurance (PMI). You can skip the mortgage insurance if your down payment is at least 20%.
    • Conforming loans: These fall within the criteria set by the Federal Housing Finance Agency (FHFA) and are limited to a loan amount of $548,250. The limit may vary in higher-cost areas like Hawaii and Alaska.
    • Non-conforming loans or jumbo loans: These home loans go over the loan limit. Typically, jumbo mortgage rates are higher as these can be riskier for lenders. Borrowers are expected to settle higher down payments (10-20% or more) and will need strong credit.
    • Fixed-rate mortgages: A fixed-rate mortgage maintains the same interest rate throughout the life of the loan. Fixed-rate mortgages may come in terms of 15, 20, or 30 years. 
    • Adjustable-rate mortgages (ARM): Opposite of fixed-rate home loans, ARMs start with a period of fixed rates – typically below-market for an introductory period of 5-10 years. After that, your lender adjusts the rates periodically. This is good for homeowners who don't plan on having their home loans too long.
    • FHA mortgages: An FHA mortgage is insured by the Federal Housing Administration (FHA). This government-backed loan allows down payments as low as 3.5% and can accommodate homeowners with credit scores as low as 500. FHA loans are best for buyers with lower cash savings or who don't otherwise qualify for conventional loans.
    • USDA loans: USDA loans are backed by the United States Department of Agriculture. Usually, no down payment is required, but you must meet income and home location requirements. These are best for buyers with limited income looking for low-down payment options.
    • VA loans: VA home loans are guaranteed by the US Department of Veteran Affairs. These are offered to eligible veterans and active members of the Armed Forces. If you meet the service requirements, you can buy a home with no down payment and at low rates versus other home loan products.
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    Affordability

    Because Texas mortgage rates can change daily, we don’t look at a lender’s lowest or best rates when assessing their affordability. Instead, we look at how easy the lender makes it to qualify for a home loan. We measure this with the following criteria:

    • Minimum credit score: Scores range from 300 to 850, however, most mortgage lenders look for buyers with a minimum score of 620. Some lenders may consider alternative forms of credit for people with low to no credit scores, while others have more lenient requirements for first-time homebuyers and borrowers who meet income requirements.
    • Minimum down payment: This depends on your mortgage terms, but it can go as low as 3%. Higher down payments may lower your mortgage’s interest rates. Keep in mind that a DP lower than 20% requires private mortgage insurance.
    • Closing costs: Besides down payments, there may be additional fees when finalizing loan documents. Home loans can come with service fees, application fees, closing fees, and the like, typically amounting to 2-5% of your loan amount. Mortgage lenders are legally required to disclose these when you receive your mortgage application, so watch out for hidden fees. Some lenders may fold closing costs into your mortgage or waive them altogether.
    • Programs for first-time home buyers: Check with your mortgage lender if they offer assistance on down payments, insurance, and closing fees. This is especially helpful for first-time buyers or low- to moderate-income buyers. 

    Application Process

    How convenient is the application process? Can you apply for a Texas home loan online? This is essential for those who live far away or wish to observe social distancing protocols. Check if the lender offers rates online, as well – having these rates makes it easier to compare potential mortgage companies.

    We also looked into how long the application process usually takes and whether or not the mortgage company discloses its rates online. If you’re hoping to close a bid on a house or property before anyone else, go for a mortgage lender with shorter closing times.

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    Customer Service & Satisfaction

    The best mortgage lenders don't just seal the deal on the best home loans. After all, a company's reputation lies in how well it treats its customers. 

    Reviews can tell you this much, but to look further, we surveyed studies from two agencies: JD Power, a marketing company known for its annual customer satisfaction reports, and the Better Business Bureau (BBB), which helps people find trustworthy businesses.

    Availability

    If you prefer to get assistance and support in person, it’s important to choose loan companies that have branches near you.

    6 Best Texas Mortgage Companies

    Before we get into our detailed breakdown of the best mortgage lenders in Texas, here’s a quick overview of our top picks:

    Rocket MortgageGuaranteed RateBank of AmericaChaseNavy Federal Credit Union
    Best forOverallOnline experienceFirst-time homebuyersJumbo loansVA loans
    Loans
    Conventional loan
    FHA loan
    VA loan
    USDA loan
    Conforming mortgage loan
    Jumbo loan
    Fixed-rate loan
    Adjustable-rate mortgage
    Other criteria
    Min. credit score (FICO)FHA580600620620No info
    VA620600620620620
    USDAN/A620N/AN/AN/A
    Conventional620620620620620
    Jumbo700700680No infoNo info
    Min. down payment3%3%3%3%0%
    BBB rating (A+ to F)A+A-A+A+A
    JD Power rating (out of 1000)860N/A806814889

    1. Best Overall: Rocket Mortgage by Quicken Loans

    Rocket Mortgage is the online mortgage solution by Quicken Loans, America's largest mortgage company, so you can count on competitive rates for a variety of home loan products. You can get a home loan for as low as 3% down if you're a first-time buyer or borrower. 

    Rocket Mortgage ranks highest in JD Power’s customer satisfaction report for a reason. Customer service is available online until midnight EST, so there’s always a home loan expert ready to assist or answer your questions.

    On the downside, Rocket Mortgage doesn’t have brick-and-mortar locations. It also does not offer USDA loans, and lender fees can be steep.

    Available in: Fully online, originating loans in all 50 US states. Rocket does not have physical branches.

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    2. Best for Online Experience: Guaranteed Rate

    Guaranteed Rate is another great option for online-savvy consumers looking for conventional and government-backed loans. The application process is fully online – whether via website or app – with secure digital solutions to upload your necessary loan documents. Should you need assistance or encounter issues with your application, customer service is available through phone or email, Monday through Saturday. 

    For better comparison, Guaranteed Rate readily offers detailed sample rates and a mortgage calculator on its website. You can also get personalized mortgage rates without giving your contact information. The application process is highly intuitive as well – you can get prequalified in as quick as 15 minutes.

    Available in: Fully online, originating loans in all 50 US states. Guaranteed Rate has no physical branches.

    3. Best for First-Time Homebuyers: Bank of America

    Bank of America is one of the largest banks worldwide, so you'll easily find a branch near you if you want to apply for home loans in person. It has a dedicated online educational series to help first-time homebuyers navigate the whole process.

    What’s more, Bank of America’s Community Homeownership Commitment makes buying your home all the more affordable, with grant programs for closing costs and down payments. And for qualified, preferred clients, Bank of America offers discounts on mortgage origination fees – ranging from around $200 to $600.

    Despite a wide range of mortgage products, Bank of America doesn't offer USDA loans. It’s also a bit slow in terms of speed of application – pre-approval can take 10 days and around 30 to 45 days to close.

    Available in: All 50 US states.

    4. Best for Jumbo Loans: Chase

    Chase Mortgage is a subsidiary of multinational banking company JPMorgan Chase & Co., which makes them a reliable and reputable lender. It offers quality in-person services, with over 4,700 branches across the US. 

    Borrowers may already be banking with the company. This makes for an organized and streamlined home loan application – especially for jumbo loans. It’s also easy to manage your home loan online through the Chase app.

    On the other hand, Chase may be stricter with income requirements depending on your loan type, and service fees can also be quite steep. You'll also need to speak to a home loan adviser to complete your application. It usually takes 21 days to close your contract.

    Available in: All 50 US states.

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    5. Best for VA Mortgages: Navy Federal Credit Union

    The Navy Federal Credit Union puts the military community at the heart of its services, having served over 10 million military members and their families since 1933. Customer service is a huge plus – their loan officers are familiar with the experiences and needs of military members and their families. 

    Navy Federal offers a HomeBuyer’s Choice Loan, with no down payment – a great option for members who don’t want to wait too long to save for a new home. It also has a Military Choice Loan, making homeownership much more affordable for members of the military. 

    However, the Navy Federal Credit Union only services its members, so you’ll need to apply for a Navy Federal membership if you’re eligible. 

    Available in: All 50 US states.

    Conclusion

    With a bustling economy, a thriving community, and great food to boot, Texas is a perfect place to live or relocate. Have you already spotted the Texas property or home you're dreaming of calling your own? Shopping for a mortgage lender is just as important as shopping for a home. 

    Get in touch with Wesley Mortgage, LLC to discover more about other lenders and find the best rates for financing your Texas home!

    Written By Ed Wallace
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