Get answers to your Texas mortgage questions, from first-time homebuyer programs to refinancing, property taxes, and the Texas real estate market.
Posted by TexasHomeowner · 47 replies
Texas's homestead exemption reduces your home's taxable value for school district taxes by $100,000 (increased from $40,000 in 2023). If your home is appraised at $350,000, you only pay school district taxes on $250,000. Additionally, if you are 65 or older or disabled, you receive an additional $10,000 exemption and your school district taxes are frozen. Most Texas counties also offer a 20% exemption on county taxes (minimum $5,000). To claim the exemption, file a homestead exemption application with your county appraisal district by April 30, and you must own and occupy the property as your primary residence on January 1. The exemption must be re-applied for if you move to a new property.
Posted by FirstTimeBuyer_TX · 52 replies
FHA loans in Texas require a minimum 3.5% down payment with a 580+ credit score (or 10% down with a 500-579 score) and include a 1.75% upfront mortgage insurance premium plus annual MIP of 0.55%-0.85%, which continues for the life of the loan if you put less than 10% down. Conventional loans typically require 620+ credit and 3-20% down; with 20% down you avoid PMI entirely. In Texas's high-price markets like Austin and Dallas, conventional loans often make more sense for buyers with good credit because the FHA loan limit in most Texas counties is $498,257. VA loans remain the best option for eligible veterans with zero down payment and no PMI. The right choice depends heavily on your credit score, down payment savings, and how long you plan to stay in the home.
Posted by TaxRateShocked · 61 replies
Texas property taxes average 1.6%-2.0% of appraised value annually, compared to the national average of around 1.1%. This is largely because Texas has no state income tax, so local governments, including cities, counties, school districts, and special districts, rely almost entirely on property taxes to fund services. School districts typically account for 50-60% of your total property tax bill. Each entity sets its own tax rate per $100 of appraised value, multiplied against your appraised value minus exemptions. Harris County (Houston) and Travis County (Austin) residents often pay effective rates between 1.8%-2.5% on recently appraised properties, making budgeting for property taxes essential before purchasing.
Posted by NewTexanBuyer · 38 replies
The Texas State Affordable Housing Corporation (TSAHC) and the Texas Department of Housing and Community Affairs (TDHCA) both operate first-time homebuyer programs. TSAHC's Homes for Texas Heroes provides down payment assistance of 3%-5% as a grant (never repaid) for teachers, firefighters, EMS, police, corrections officers, and veterans. The My First Texas Home program offers 30-year fixed mortgages at below-market rates plus down payment assistance as a second lien at 0% interest. Income limits typically range from $85,000-$110,000, and purchase price limits vary by county. The Texas Mortgage Credit Certificate also provides a federal tax credit of up to $2,000 per year for the life of the loan, representing significant long-term savings.
Posted by ProtestMyTaxes · 43 replies
Every Texas property owner has the right to protest their appraisal district's valuation. When you receive your Notice of Appraised Value (usually in April), you have until May 15 or 30 days from the notice date to file a protest with your county Appraisal Review Board (ARB). Your strongest arguments include comparable sales evidence at lower prices, documentation of property condition issues like foundation damage or incorrect square footage, and evidence of incorrect property characteristics. Most appraisal districts now offer informal hearings where staff review evidence before the formal ARB hearing. Roughly 55% of protests that proceed to hearing in Texas result in some reduction, with the average reduction in Harris County around 8%.
Posted by MortgageMath · 49 replies
A 15-year mortgage typically has a rate 0.5%-0.75% lower than a 30-year, and you build equity significantly faster; after 5 years on a 15-year loan you've paid off roughly 25% of principal versus about 8% on a 30-year. However, the monthly payment on a 15-year is approximately 40% higher. Many Texas financial advisors suggest taking the 30-year if you can invest the payment difference at a return exceeding the mortgage rate, historically achievable given long-term market returns. The 30-year also provides flexibility during financial hardship. Given Texas's high property taxes, the lower mandatory payment of a 30-year can provide critical breathing room in your monthly budget that a 15-year does not.
Posted by TexasMarketWatcher · 67 replies
Texas's three major metro markets have diverged significantly in recent years. Austin experienced the most dramatic pandemic-era price surge (65%+ from 2020-2022) and has also seen the sharpest correction, with median prices down 15-20% from peak by late 2023, though inventory remains below historical norms. Houston's market is more stable and affordable, with median home prices around $310,000 versus Austin's $550,000+, partly due to fewer land use restrictions and higher supply. The Dallas-Fort Worth metroplex sits between these extremes, with strong job growth from corporate relocations (Toyota, Goldman Sachs, Oracle) maintaining demand while affordability is improving from 2022 peaks. All three markets benefit from Texas's continued population growth of 500,000+ new residents annually.
Posted by ClosingCostQuestion · 35 replies
Texas closing costs for buyers typically range from 2%-5% of the purchase price. Major components include lender origination fees (0.5%-1% of loan), appraisal fee ($500-$800), title insurance (lender's policy required; owner's policy optional but strongly recommended), attorney or escrow fees ($300-$500), survey ($400-$700, often required in Texas), prepaid homeowners insurance (12 months upfront), and prepaid property taxes (2-5 months into escrow). Texas does not have a mortgage recording tax or transfer tax unlike many other states. On a $400,000 home with a conventional loan, total closing costs typically run $8,000-$16,000, so budgeting carefully for this beyond your down payment is essential.
Posted by VeteranBuyer · 41 replies
Yes, VA loan entitlement can be used multiple times. If you paid off your previous VA loan and sold the property, your entitlement is fully restored and you can obtain another VA loan with no down payment. If you still have an outstanding VA loan, you have remaining entitlement that often allows purchase of a second property with no down payment up to the county conforming loan limit ($766,550 in 2024). The VA Funding Fee for subsequent uses is 3.3% for no down payment versus 2.15% for first use, though this can be financed into the loan. Disabled veterans with a service-connected disability rating of 10% or higher are exempt from the funding fee entirely, representing significant savings on Texas home purchases.
Posted by BuydownQuestion · 53 replies
A mortgage rate buydown reduces your interest rate by paying upfront points at closing. Typically one point equals 1% of the loan amount and lowers the rate by 0.25%. A 2-1 buydown temporarily reduces your rate by 2% in year 1 and 1% in year 2, then reverts to the note rate. This is often seller-funded in the current Texas market as a purchase incentive. Whether a buydown is worth it depends on your break-even calculation: divide the upfront cost by the monthly savings to find when you recoup the investment. Permanent buydowns make sense if you plan to stay long-term; temporary buydowns make sense if you expect to refinance when rates fall. In Texas, given high property taxes, some buyers prefer sellers to reduce price rather than buy down the rate.
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