If you’re looking to buy a home in Texas, you’ll need to find a mortgage lender. Many lenders are licensed to do business nationwide or in the majority of states, so although you’re buying a home in Texas, your lender doesn’t necessarily have to be based there.
With price points ranging from a median $195,000 in Killeen to nearly $400,000 in the booming capital of Austin, according to the Texas Association of Realtors, how much mortgage you’ll need depends on where you want to call home. Here’s a rundown of some of the best mortgage lenders in Texas.
To determine the best mortgage lenders by state, 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 Texas
The lender’s name says it all: Better.com, also known as Better Mortgage, aims to make the process of getting a mortgage in Texas — and the majority of other states — better. The biggest perks of working with this lender are that you’ll save money and time: Better doesn’t charge application, origination or underwriting fees; rate quotes come back in just a few seconds; and your preapproval letter — a must for serious buyers in today’s market — only takes three minutes to generate. Better also has the best Bankrate Score among the lenders reviewed in Texas — although it’s important to point out that some borrower reviews indicate the lender could work harder to live up to its name, with a 3.8 out of 5 customer rating. These marks lag behind some of the competition.
You’ll handle the mortgage process completely online with First Mortgage Direct, the online lending division of First Mortgage Solutions, with the added benefit of never feeling like you have to act immediately — the lender explicitly states that it doesn’t tout any limited-time offers to entice borrowers. As you move through a speedy online process, you can expect a prequalification within 24 hours with this lender, and most borrowers close within 30 days. You can also be confident you’ll avoid frustrating surprises, as First Mortgage Direct promises no origination fees and no hidden fees overall.
Since you’re buying a home in Texas, you’re one of the few who can work with LoanMonkey, which only operates in California and Texas at this time. While LoanMonkey is a mortgage broker, not a lender, the company can help you find the best mortgage for your situation and get a clear picture of every fee you’ll pay, all online. Calling its process “The Online Everything Mortgage,” the broker also allows you to sync your banking information online and skip uploading any documents. However, the broker is relatively new to the business, having launched in 2019.
LowRates (or LowRates.com) aims to offer borrowers the substantial savings that can come with — you guessed it — low rates. There are plenty of reasons to consider LowRates for your mortgage in Texas: an approval and underwriting process that takes less than 24 hours, down payment assistance options and rave borrower reviews. While you’ll need to be comfortable with an online experience with this lender, it’s important to note that if you do want to speak with someone in person, Sun West Mortgage Company, which operates LowRates, has six locations in Texas.
If you’re a member of the military or have a family member who has served, add Navy Federal Credit Union to your consideration list. The credit union doesn’t charge processing or underwriting fees, and also offers some extra assurances that you’re getting the best deal, including the ability to relock your rate. While you’ll need to qualify for membership, you can also take advantage of additional options for banking and other financial needs, including surcharge-free ATM access and branch locations in San Antonio, Houston, Dallas and other parts of the state.
While Rocket Mortgage lacks information about fees online, there are plenty of pros about the Quicken Loans-affiliated lender, too: a float-down rate lock, customer service available via online chat and low-down payment options, to name a few. The biggest upside, though, might be testimonials from borrowers: Ninety-nine percent of the more than 2,000 borrowers who reviewed Rocket Mortgage on Bankrate would recommend the lender to others.
Texas Trust Home Loans prides itself on helping you avoid some of the extra fees associated with getting a mortgage. There are no application or origination fees with this lender, affiliated with American Heritage Capital, but as with other lenders, you’ll likely need to pay for fees like an appraisal, which with this lender averages $490. While Texas Trust ranks a bit lower in terms of Bankrate Score (4.3 out of 5), it makes up for it on the crowdsourced side: With nearly 600 reviews from borrowers, the lender has a perfect 5.0 rating.
Texas conforming loan limits
As you work toward securing a mortgage, it’s important to note that your lender isn’t the only one with requirements in place for approval. The amount you borrow might need to fall under conforming limits depending on your loan. If it’s a conventional mortgage, the cap is $548,250 — the limit imposed by the Federal Housing Finance Agency in 2021. If it’s backed by the FHA, your budget will need to be smaller. In most counties in Texas, FHA loans cannot exceed $356,362 in 2021. However, there are certain exceptions in more expensive markets. You can browse Bankrate’s county-by-county listing of loan limits in Texas before you start looking for a home.
Texas first-time homebuyer programs
If you’re a first-time homebuyer in Texas, you might be able to qualify for assistance through the Texas Department of Housing and Community Affairs. The programs through this organization can help you get some of the lowest interest rates and up to 5 percent down payment assistance.
Eligibility is based on a few key factors, including your credit score and income and purchase price limits. In some cases, you could be limited in lender you can work with, so start your search for a mortgage with the Texas Department of Housing and Community Affairs’ list of approved lenders.
Why it pays to shop for a mortgage lender
You probably won’t buy the first house you see, and you should take that same approach to finding a lender for your mortgage. The interest rate is important, but it’s not the only piece that matters — lenders charge different amounts for origination fees, and they often have different average closing timelines. Plus, research shows that shopping around translates to saving: A study from Freddie Mac revealed that borrowers who got five different rate quotes managed to save an average of nearly $3,000 over the life of the loan. Simply put, getting more quotes means spending less cash.