Everything’s big in Texas, but some cities are getting even bigger, including Houston. The metropolitan area ranked third in year-over-year population growth in the summer of 2020, according to Census data, and by 2030, Harris County — home to Houston — is expected to have more than five million residents.
If you’re planning to be one of those new residents (or if you already call the area home and want to refinance your mortgage), it’s important to compare rates and terms from a range of mortgage lenders. Here are some of the best to consider.
To determine the best mortgage lenders by city, Bankrate evaluated lenders based on several criteria, including affordability (APR and fees); expediency (approval and closing times); and experience (including customer service support). In general, the best mortgage lenders have a high Bankrate Score and high ratings from borrowers.
Best mortgage lenders in Houston
- Good if: You want to avoid fees and close quickly
Texas Trust Home Loans offers mortgages in five states, and as its name implies, The Lone Star State is one of them. That’s good news if you’re looking to buy a home in Houston, because the lender’s rates were some of the lowest among all lenders compared on Bankrate (as of September 2021) — particularly if you’re willing to pay points upfront for a discount that’ll reward you in the long term. On average, closings take just 25 days.
- Full estimate of closing costs available online without needing to share your email or name
- Currently doesn’t charge any lender fees
- Charges a penalty rate if you change any loan terms after you lock your rate
- No VA or USDA loans
- Good if: You prefer an all-online experience
Better.com is an online mortgage lender that has been in business for five years, and promises three key selling points in the homebuying process: speed, transparency and affordability. Among the benefits of working with this lender, it can issue a preapproval in just three minutes, and the typical closing takes just 21 days.
- No lender fees
- 24/7 customer support
- No VA or USDA loans
- Requires at least a 620 credit score (even for FHA loans)
- Good if: You’re looking to refinance
Sage is a mortgage broker that can help you compare rates and terms from multiple lenders, especially if you’re looking to refinance to take advantage of super-low interest rates before they begin to rise. You should be able to close your loan fairly fast through this broker — the typical closing is completed within 29 days. This can translate to immediate savings on your next monthly mortgage payment.
- Access to some of the lowest refinance rates
- Quick closings
- Charges fees, which can be up to 3 percent of the loan
- Website has limited features
- Good if: You’re interested in an FHA or VA loan
While many mortgage lenders beefed up borrower requirements in the pandemic, LowRates.com still accepts a credit score as low as 500 for an FHA or VA loan. If you need assistance with the upfront costs of a home in Houston, LowRates.com also participates in down payment assistance programs for eligible borrowers.
- Accepts lower credit scores
- A+ rating from the Better Business Bureau
- Quick closings (as few as 20 days)
- Website experience isn’t optimal
- No Sun West Mortgage (LowRates’ parent company) branches in Houston
Local Houston mortgage lenders
While most everything can happen online these days, getting a mortgage is a major undertaking. If you prefer a mortgage lender with a network of branches where you can find in-person assistance, consider one of these with locations in Houston.
- Good if: You need your offer to stand out to a seller
Fairway Independent Mortgage Corporation has three offices in Houston and more in the greater area, including that of mortgage team The Wood Group. Notably, The Wood Group’s Power Buyer program is designed to make you stand out as a highly qualified buyer, and it comes with a 15-day closing guarantee.
CommunityBank of Texas
- Good if: You want a loan to build a new home
CommunityBank of Texas operates several branches in the Houston metro area, and the bank’s mortgage programs include short-term, interest-only construction loans as well as land loans for projects that haven’t broken ground yet. If you’re interested, you’ll be able to take advantage of the bank’s suite of checking and savings products, too.
- Good if: You want to borrow from one of the biggest banks in the country
Bank of America has a massive presence in Houston and Harris County, and the financial giant performs especially well when it comes to helping customers buy new homes: It came in second for customer satisfaction in J.D. Power’s 2020 mortgage origination study. The bank offers programs for all types of homebuyers, and if you’re part of its Preferred Rewards program (and maintain a high deposit balance), you might be able to save up to $600 on the mortgage origination fee.
What to know when getting a mortgage in Houston
Houston’s real estate values surged during the pandemic. In August 2020, the average single-family home in the area sold for just over $333,600. By August 2021, that average price had soared to more than $380,200, according to the Houston Association of Realtors. If you don’t need a backyard, you might want to explore the condo market, where the average price tends to be lower overall.
Regardless of what type of property feels like a good fit for your lifestyle, you’ll need to get preapproved and be ready to act fast. The average property in Houston sells after 17 days on the market, according to real estate brokerage Redfin, but the hottest homes go much faster — around five days.
Saving up for a down payment on a new home in Houston might feel overwhelming, so before you start comparing mortgage lenders, take a look at first-time homebuyer programs in Texas. Depending on your income and the purchase price of the property, you might be able to get up to 5 percent down payment assistance.