Frequently Asked Questions About Loans

Interest Rates–How are they Determined?

The two toughest questions associated with loans are–how do lenders decide which interest rate to offer, and what can I do to get the a favorable rate? The answers to them are based on three criteria:

Credit Score–Credit scores are one of the most important aspects of assessing risk. Lenders also look for a solid history of paying debt in a timely manner.

Ratios—Lenders calculate and review your monthly obligations that do not include utilities, phone bills, or items usually not found on credit reports. After that, two ratios are determined–front-end and back-end. Most lenders consider a “grade A” Conventional loan to be one in which a borrower has a front-end ratio of less than 28% and a 36% ratio for the back end. As an example, a borrower has a gross monthly income of $4,000, a car payment of $350, credit card payments of $55, and a new house payment of $1,000. Here’s how the ratios are calculated:

  • $4,000/$1,000 = 25% front-end
  • $4,000/$1,405 = 35% back-end

Down Payments–The lender factors in the amount of a borrower’s initial down payment. A lower down payment usually means a higher interest rate. Basically, the more risk the lender has, the higher rate for the borrower. Even if a borrower has a perfect credit score and wants to put 0% down, their interest rate can be as much as 0.5% higher than a person who puts 10% down.

After these three factors are considered, underwriting will make sure the application meets specifications set by the loan program for approval.

What are Discount Points?

Discount points can be used to lower interest rates. Lenders generally charge them for these purposes: 1 discount point = 1 percent of the loan amount. Discount fees are normally charged as line items on the Closing Disclosure when it’s closing time.

How Much Should Closing Costs Be?

Your costs at closing depend on the loan type you decide is best for you. Certain states may vary, but generally, you pay the following fees:

  • Origination: One percent of the amount of your loan–the cost of establishing the loan
  • Discount Points: Can be used to lower interest rates (refer to the section on Discount Points above)
  • Appraisal: Depends on the size of the house, amenities, and other factors.
  • Credit Report: Fee for pulling your credit report from credit bureaus (refer to Credit Report question in the FAQs section)
  • Underwriting: Paid to the investor for provided services.
  • Processing Fee: Paid to the lender for provided services.
  • Flood Certificate: Certification stating your property is not in the 100-year flood zone.
  • Title Charge: Paid to the title company for title search and closing your loan.
  • Title Policy: 1% of the purchase price depending on the home state (usually paid by the seller).
  • Recording: Payment for filing fees depending on the home state.

Many of these costs are charged by third parties and cannot be negotiated by you or the lender.

Why do I Need a Credit Report?

A critical point a Loan Officer considers when helping you choose which program best fits your needs is to examine your credit. The reason for this report is to pull your credit history from each of the three main credit-reporting agencies: Experian, TransUnion, and Equifax. It is required that lenders obtain your credit report from outside agencies as they are impartial to the credit report findings. They verify your account history and balances on your report. You’ll receive a “credit score.”

What are the Differences Between Conventional and Federal Housing Administration (FHA) loans?

There are many distinctions between a Conventional loan and an FHA loan. In this section, we’ll outline the key differences.

The minimum down payment for an FHA loan is 3.5%, whereas the minimum down payment for a Conventional loan can be as low as 3%, dependent on credit score. Also, the funding for Conventional loans must be “seasoned,” which means the money must have been in the bank for 60 days prior to buying the home. It can also be from the proceeds of selling your existing home.

An FHA loan requires a Mortgage Insurance Premium (MIP) payment upfront. For down payment less that 20% of loan amount, Conventional loans required Private Mortgage Insurance (PMI).

A common myth is that taxes vary depending on which loan is chosen. Let’s debunk that. On either type of loan, taxes will remain the same. Title companies closing the loan submit the taxes directly to the lender. If you live in an attorney state, your representation is the one that orders your tax certificate from the appraisal district. Taxes reported to the lender will be included in your monthly payment. There won’t be any mark-up or service charges over and above the true tax amount.

Homeowner’s insurance works the same way. Pay the lender for your policy amount on a month-to-month basis. The lender escrows the amount and sends it to your insurance company at the end of the year when it’s time to renew.

Differences in terms of interest rates vary depending on your loan program and qualifications.

The portion of payment for principal and interest is calculated by configuring the amount of the loan.  Taxes, Insurance premiums  (MIP included in the balance payment on an FHA loan/ PMI included in payment on Conventional loan) . Reach out to your Supreme Lending DFW representative for more info on FHA and Conventional loans.

Home Loan FAQs
Home Buying 101
What are the key steps to buying a home in Texas?

Beginning your journey starts with a thorough assessment of your finances. Secure a pre-approval for your home loan which puts you in a strong position when house hunting. Once pre-approved, team up with a realtor who’s familiar with the local market. After finding your dream property, make a compelling offer. Once your offer is accepted, your loan undergoes an underwriting process, and upon approval, you’ll proceed to closing. Delve deeper into the home purchase process here.

How can I prepare financially for home buying?

Kickstart your preparations by obtaining a copy of your credit report and rectifying any discrepancies. Simultaneously, build a robust savings buffer for down payments and unforeseen expenses. Remember, a pre-approval from a lender isn’t just a formality; it’s a testament to sellers that you’re a serious contender.

What programs or incentives are available for first-time buyers in Texas?

First-time homebuyers in Texas have an advantage. The state rolls out programs like the Texas First Time Homebuyer Program and the TSAHC Home Loan Program, designed to cushion first-time homebuyers by offering assistance with down payments and closing costs.

DTI Calculator
What is DTI, and why is it important for loan approval?

DTI, short for Debt-to-Income ratio, represents the proportion of your income allocated to debt repayments. Lenders keenly observe this ratio to gauge your financial discipline and ability to manage additional debts. A healthy DTI indicates you’re living within your means and can comfortably accommodate home loan repayments.

How can I calculate my DTI ratio?

To pinpoint your DTI, divide your total monthly debt payments by your gross monthly income. The resulting figure, expressed as a percentage, is your DTI. For a more hands-on understanding and to play around with numbers, use our comprehensive calculators here.

What is the ideal DTI ratio for mortgage approval in Texas?

Generally, lenders in Texas favor a DTI ratio under 43%. However, this number isn’t set in stone and can vary based on the lender and the specifics of the loan in question.

Mortgage Insurance
What is mortgage insurance, and when is it required?

Mortgage insurance serves as a safety net for lenders, safeguarding them if a borrower defaults on a loan. Typically, if your down payment is less than 20% of the home’s purchase price, you’ll be required to pay mortgage insurance.

How much does mortgage insurance cost in Texas?

Mortgage insurance premiums can vary, but they typically range from 0.3% to 1.5% of the original loan amount per year. For specifics tailored to Texas and various loan types, explore here.

Are there ways to avoid or reduce mortgage insurance expenses?

Certainly! Making a larger down payment, aiming for at least 20% of the home’s value, can eliminate the need for mortgage insurance. Additionally, once you’ve built enough equity in your home, you can request to have the insurance removed.

Property Tax
How are property taxes calculated in Texas?

Property taxes in Texas are levied by local governing bodies and are based on the assessed value of your property. Each entity sets its tax rate, which, when combined and applied to your property’s value, determines your tax obligation.

Can I prepay property taxes, and are there benefits to doing so?

Yes, you can prepay property taxes in Texas. Doing so can offer potential tax benefits, depending on your financial situation. However, it’s wise to consult with a tax advisor before making such decisions.

What happens if I don't pay my property taxes on time?

Delay in property tax payments can result in penalties and interest. In extreme cases, the taxing entity could place a lien on your property, which might lead to foreclosure if taxes remain unpaid.

Recasting Mortgage
What is mortgage recasting, and how does it work?

Mortgage recasting involves paying a lump sum towards your mortgage principal and then having the monthly payments recalculated (or “recast”) based on the reduced balance. This results in lower monthly payments for the remainder of the loan term.

Is recasting a mortgage a good option in Texas?

For homeowners in Texas with a substantial lump sum, like a bonus or inheritance, recasting can be a strategic move. It allows you to reduce monthly payments without refinancing. However, weighing the pros and cons and possibly consulting with a financial advisor is essential.

What are the potential savings and drawbacks of recasting?

Recasting can lead to significant savings in monthly payments. However, you won’t change your interest rate (as you would with refinancing), and there might be fees associated with the recasting process.

TSAHC (Texas State Affordable Housing Corporation)
What is TSAHC, and how can it assist homebuyers in Texas?

TSAHC, the Texas State Affordable Housing Corporation, is a nonprofit organization that provides fixed-rate mortgage financing, down payment assistance, and homebuyer education for qualified Texans. Aiming to assist low- and moderate-income homebuyers, it simplifies the home-buying process by offering favorable terms and significant financial assistance. For a comprehensive breakdown, visit here.

Are there income limits or requirements for TSAHC programs?

Yes, TSAHC programs have income requirements, ensuring that they cater to those who need them the most. Income limits vary depending on the county and the number of family members in a household. More details can be found at the TSACH Home Loan Program page.

How can I apply for TSAHC assistance?

To apply for TSAHC assistance, you should approach a TSAHC-approved lender or reach out to housing counselors. They’ll guide you through the application process, ensure you meet the eligibility criteria, and help you select the best program for your needs.

Appraisal at Value
What does it mean to have an appraisal at value?

An appraisal at value means that the property’s assessed value by a professional appraiser matches the purchase price or the amount specified in the sales contract.

How does an appraisal at value impact the loan process?

An appraisal at value signifies to the lender that the loan amount you’re seeking aligns with the property’s market value. This reduces the lender’s risk, potentially resulting in favorable loan terms and easing the approval process.

Can I challenge an appraisal if it comes in below the value?

Yes, if you believe the appraisal is inaccurate, you can challenge it. You’ll need to provide relevant documentation or evidence, such as recent comparable sales, to support your claim.

Comparing Loans
What factors should I consider when comparing different loan options?

When comparing loans, consider the interest rate, loan term, monthly payment, fees associated with the loan, and any prepayment penalties.

How do interest rates, terms, and fees affect loan comparisons?

Interest rates influence your monthly payment and the total interest paid over the life of the loan. The loan term, typically ranging from 15 to 30 years, affects both your monthly payment and total interest. Fees can add to the loan’s upfront costs, impacting the overall affordability.

Are there tools or resources to help me compare loans effectively?

Absolutely. Many online calculators and comparison tools are available. Consulting with a mortgage broker or lender can also provide valuable insights tailored to your situation.

Appraisal Waiver
What is an appraisal waiver, and when might it be offered?

An appraisal waiver is an option provided by some lenders where the requirement for a professional property appraisal is waived. It may be offered if the lender deems there’s enough data available about the property’s value or if the loan amount requested is significantly lower than the property’s estimated value.

Is an appraisal waiver a good option for all borrowers in Texas?

Not always. While waiving an appraisal can speed up the loan process and save money, it may not be suitable if there are doubts about the property’s accurate market value.

What are the risks associated with appraisal waivers?

The primary risk is potentially overpaying for a property if its true market value is lower than the purchase price. Without a professional appraisal, discrepancies in property value might be overlooked.

Mortgage Approval Timeline
How many days before closing do you typically get mortgage approval in Texas?

In Texas, mortgage approval typically comes around 15-30 days before closing, but this can vary depending on the specifics of the loan and borrower details.

What factors can affect the timeline for mortgage approval?

Factors include the complexity of the loan, borrower’s creditworthiness, underwriting delays, property appraisal issues, and any required documentation.

How can I ensure a smooth and timely approval process?

To expedite approval, provide all requested documents promptly, maintain open communication with your lender, and avoid making significant financial changes during the process.

Loan-to-Value (LTV) Calculation
What is LTV, and why is it important in the mortgage process?

LTV, or Loan-to-Value ratio, represents the relationship between the loan amount and the property’s appraised value. It’s crucial as it helps lenders determine the risk associated with the loan. A higher LTV often indicates higher risk.

How can I calculate my LTV ratio?

LTV can be calculated as: (Mortgage Amount / Appraised Property Value) x 100%. So, if you borrow $180,000 for a $200,000 home, your LTV is 90%.

What LTV ratios are typically required in Texas?

In Texas, many lenders prefer an LTV of 80% or lower, though there are loan programs available for higher LTVs, especially for first-time buyers.

Escrow Analysis
What is an escrow account, and how is it used in Texas loans?

An escrow account is a third-party account used to hold and manage funds for property taxes and homeowners insurance. In Texas, lenders often set up escrow accounts to ensure these obligations are met on time.

How often is an escrow analysis conducted?

An escrow analysis is typically conducted annually. It ensures the correct amount is being collected to cover taxes and insurance without a significant surplus.

Can I change or cancel my escrow account?

Depending on the terms of your loan and your lender’s policies, you may be able to adjust or cancel your escrow account. However, it often requires meeting certain criteria, such as a specific LTV ratio.

APR in Mortgages
What is APR in the context of mortgage loans?


APR, or Annual Percentage Rate, represents the true cost of borrowing in the form of a mortgage. It includes not only the interest rate but also other charges and fees involved in obtaining the loan.

How is APR calculated, and what does it include?

APR is calculated by considering the interest rate, points, mortgage broker fees, and other credit charges a borrower may be required to pay, expressed as a yearly rate. It provides a holistic view of the loan’s cost.

Why is understanding APR important for borrowers in Texas?

For Texas borrowers, understanding APR is crucial as it offers a complete picture of a loan’s cost. It allows for easier comparisons between loan offers, ensuring borrowers can find the most cost-effective mortgage option.

Mortgage Loan Process
What are the key stages of the mortgage loan process in Texas?

The key stages include: pre-qualification, loan application, underwriting, appraisal, loan approval, and closing.

How long does the typical mortgage process take?

The typical mortgage process in Texas can take anywhere from 30 to 45 days from application to closing, depending on various factors.

What can I do to expedite the loan process?

To expedite the process, provide all requested documentation promptly, maintain transparent communication with your lender, and promptly address any issues that arise.

Buying a Second Home
Can I buy a second home in Texas that will become my primary residence?

Yes, you can purchase a second home in Texas with the intent of making it your primary residence in the future.

Are there special considerations or requirements for such a purchase?

While many requirements remain consistent with primary home purchases, lenders may require a larger down payment, have stricter credit score requirements, and evaluate your ability to manage multiple property expenses.

What are the benefits of owning a second home in Texas?

Benefits include potential rental income, property appreciation, tax advantages, and the flexibility to choose where you live in the future.

Credit Approval
What does it mean to be credit approved for a mortgage in Texas?

Being credit approved means a lender has evaluated your credit history and deemed you financially trustworthy to be offered a mortgage loan.

How can I improve my creditworthiness for loan approval?

Improve your credit score by paying bills on time, reducing outstanding debts, avoiding opening new credit lines unnecessarily, and checking your credit report for errors.

What role does credit history play in the approval process?

Credit history offers lenders insight into your borrowing habits and reliability in repaying loans, greatly influencing your loan terms and interest rates.

Paying Closing Costs with a Credit Card
Is it possible to pay closing costs with a credit card in Texas?

While some lenders may allow it, many discourage or prohibit using credit cards for closing costs due to the risk it introduces.

What are the advantages and disadvantages of this payment method?

Advantages include the possibility of earning credit card rewards and spreading out payments. Disadvantages encompass higher interest rates on credit card balances and potential negative impacts on credit scores.

Are there limits or restrictions on using a credit card for closing costs?

Yes, many lenders have restrictions or limits. It’s essential to discuss this with your lender beforehand.

FHA Loans in Texas
What are FHA loans, and how do they work in Texas?

FHA loans are mortgages insured by the Federal Housing Administration. They allow borrowers to make a lower down payment and often have more lenient credit requirements. Learn more here.

Can I use an FHA loan to purchase a condo in Texas?

Yes, but the condo project must be on the FHA’s approved list. It’s essential to ensure the specific condo meets all FHA criteria.

What are the eligibility criteria for FHA loans in the state?

Eligibility criteria include a steady employment history, a valid Social Security number, and a down payment as low as 3.5%. There are also loan limits and property requirements. The pros and cons of these loans can be found here.

Appraisal Low ARM Cap
What is the appraisal low ARM cap, and how does it affect borrowers?

The appraisal low ARM (Adjustable Rate Mortgage) cap refers to the limit on how much the interest rate can increase during specific periods and over the life of the loan. It helps protect borrowers from dramatic rate increases.

Are there strategies for managing the impact of a low ARM cap?

Yes, borrowers can consider refinancing before significant rate hikes, ensure they understand rate adjustment frequency, and maintain an emergency fund to handle potential payment increases.

What should Texas borrowers know about ARM loans?

ARM loans can offer lower initial interest rates, but they carry the risk of rate adjustments. It’s essential to understand the loan’s terms, the frequency of rate changes, and have a strategy to manage potential rate increases.

Removing a Dispute from Credit Report
How can I remove a dispute from my credit report in Texas?

To remove a dispute from your credit report in Texas, you’ll need to contact the credit reporting agency, submit a request in writing, and provide any necessary supporting documentation.

What steps should I follow to resolve credit report disputes?
  1. Obtain a current copy of your credit report.
  2. Identify the disputed item and gather supporting evidence.
  3. Contact the credit reporting agency and the creditor in writing.
  4. If unresolved, consider seeking assistance from the Consumer Financial Protection Bureau.
How does a cleared dispute affect my mortgage application?

Once cleared, it can potentially improve your credit score, increasing your chances of securing a mortgage or receiving better loan terms.

Non-Conventional Loans
What are non-conventional loans, and who qualifies for them in Texas?

Non-conventional loans are not backed by a government agency, like FHA or VA. They cater to borrowers with unique financial situations, such as self-employed individuals or those with non-traditional credit histories.

What are the advantages and disadvantages of non-conventional loans?

Advantages include flexibility in terms and larger loan amounts. Disadvantages may involve higher interest rates or more stringent down payment requirements.

How do non-conventional loans differ from traditional ones?

The primary difference is their backing. Traditional loans are typically government-backed, while non-conventional loans are not, leading to variations in terms, qualifications, and loan limits.

Closing Costs for New Construction
What are the typical closing costs for new construction homes in Texas?

Closing costs for new constructions can include builder fees, permit fees, impact fees, and typical transactional costs like title insurance, appraisals, and lender fees.

Are there any unique considerations when closing on new construction?

Yes, timelines might be more prolonged due to construction delays, and there may be additional inspections required.

Can I negotiate or reduce these closing costs?

In many cases, yes. Builders might offer incentives, and some fees are negotiable with the lender or title company.

Community Lending Programs
What are community lending programs, and how do they benefit Texas residents?

Community lending programs aim to provide affordable housing solutions to specific groups or areas. Benefits include lower interest rates, down payment assistance, or reduced fees.

Are there specific communities or areas where these programs apply?

Yes, these programs often target underserved or low-income areas. Check with local housing authorities or lending institutions.

How can I find and access community lending resources?

Research online, contact local housing authorities, or consult with mortgage professionals familiar with Texas lending programs.

Refinancing Your Home
What is the process for refinancing a home in Texas?
  • Determine the purpose and benefits of refinancing.
  • Shop for lenders and compare rates.
  • Gather necessary documents.
  • Complete the application and undergo underwriting.
  • Close on the new loan.
When is the right time to consider refinancing?

Consider refinancing when interest rates drop significantly, your credit improves, or when you wish to change your loan term or type.

What are the potential savings and risks of refinancing?

Savings include lower monthly payments or overall interest. Risks involve incurring new closing costs, and potential penalty fees for early payoff.

Home Loan Applications
How do I complete a successful home loan application in Texas?

Start by researching loan types, gather necessary documentation, ensure your credit is in good shape, and then submit your application to preferred lenders.

What documents and information are required for the application?

Typically, income documentation, asset information, credit history, and personal identification.

What mistakes should I avoid during the application process?

Avoid changing jobs, taking on new debt, or making large purchases during the process. Always be transparent and prompt in providing the requested information.

Selling vs. Renting Calculator
Is it better to sell or rent out my property in Texas?

It depends on your financial goals, market conditions, and personal preferences. Consider potential rental income, property appreciation, and tax implications.

Are there calculators or tools to help me make this decision?

Yes, several online calculators can weigh the costs and benefits of selling versus renting. Real estate professionals can also provide valuable insights.

What factors should I consider when evaluating my options?

Consider current market conditions, ongoing costs associated with maintaining the property, potential rental income, tax implications, and your future financial goals.

Points on a Mortgage Explained
What are mortgage points, and how do they work in Texas?

Mortgage points are fees paid directly to the lender in exchange for a reduced interest rate. One point typically equals 1% of the loan amount.

When does it make sense to buy points to lower my interest rate?

Buying points makes sense if you plan to stay in the home long enough to recoup the upfront cost through the savings on interest.

What are the tax implications of mortgage points?

In many cases, points can be tax-deductible, but always consult with a tax professional for guidance specific to your situation.

Appraisal Types
What are the different types of appraisals used in Texas?

Common types include a full appraisal, drive-by appraisal, and automated valuation models (AVM).

When is each type of appraisal typically required?

Full appraisals are standard for most mortgages. Drive-by appraisals might be used for refinancing, and AVMs can be used for home equity lines or when a borrower has substantial equity.

How can I prepare for a successful appraisal?

Ensure your property is tidy, make necessary repairs, and provide the appraiser with information about recent comparable sales in the area.

Gifted Funds in Texas
Can I use gifted funds for a down payment in Texas?

Yes, gifted funds can often be used for down payments, but they must be documented properly.

Are there restrictions or requirements for using gifted funds?

Funds must be a genuine gift, not a loan. Lenders typically require a gift letter from the donor attesting to this fact.

What documentation is needed when using gifted funds?

A gift letter, bank statements showing the transfer, and sometimes documentation from the donor

FHA Assumable Loans
What are FHA assumable loans, and how do they work in Texas?

FHA assumable loans are mortgages that can be transferred from the current homeowner to a buyer. The buyer then continues the mortgage payments under the same terms.

Who can assume an FHA loan, and what are the benefits?

Anyone who qualifies under FHA guidelines can assume the loan. Benefits include potentially lower interest rates, reduced closing costs, and faster loan processing.

What are the steps to assume an FHA loan in Texas?
  • Obtain details of the current loan.
  • Apply through an FHA-approved lender.
  • Complete a credit review.
  • Attend a loan assumption closing.
Down Payment vs. Closing Costs
What's the difference between a down payment and closing costs?

A down payment is an upfront amount towards the home’s purchase price, while closing costs cover fees related to the mortgage transaction.

How much should I expect to pay for each in a Texas home purchase?

Down payments typically range from 3% to 20% of the home price. Closing costs vary, averaging 2-5% of the loan amount. For assistance with down payments, check SETH Down Payment Assistance.

Are there strategies to minimize these expenses?

Negotiate with sellers for concessions, shop around for mortgage offers, or explore assistance programs like SETH for down payment help.

Mortgage Payoff Calculation
How is the mortgage payoff amount calculated in Texas?

It includes the remaining principal balance, any accrued interest, and potential prepayment penalties.

What are the implications of making extra payments on my mortgage?

Extra payments can reduce the loan term and overall interest paid.

Are there penalties for paying off a mortgage early?

Some loans have prepayment penalties, but it varies by lender and loan type. Check your loan agreement.

Minimum Mortgage Down Payment
What is the minimum down payment requirement for different loan types in Texas?

It varies. FHA loans can start at 3.5%, conventional loans often start at 5%, and VA and USDA loans can offer 0% down.

How can I determine the right down payment amount for my situation?

Consider your budget, monthly payment comfort, and any mortgage insurance implications.

Are there options for low or no down payment mortgages?

Yes, options include FHA, VA, USDA, and special lending programs.

Mortgage Survey
What is a mortgage survey, and when is it necessary in Texas?

A mortgage survey maps out a property’s boundaries, improvements, and easements. It’s typically required during the property purchase process.

How does a mortgage survey protect buyers and lenders?

It ensures there are no boundary disputes and that the property is free from encroachments.

Who typically pays for the mortgage survey?

The buyer usually covers this, but costs can sometimes be negotiated with the seller.

Mortgage Rate vs. APR
What is the difference between a mortgage rate and APR in Texas?

The mortgage rate is the interest charged on the principal. APR includes the mortgage rate plus other loan costs, providing a comprehensive cost of borrowing.

How do I compare loan offers using these two metrics?

Use the APR for a holistic view of loan cost, but also consider the mortgage rate, especially if you plan on refinancing or moving within a few years.

Which one should I prioritize when choosing a mortgage?

Focus on APR for a complete understanding of loan cost, but also consider your long-term plans and how the mortgage rate might impact them.

Fannie Mae Second Home Guidelines
What are Fannie Mae guidelines for second home purchases in Texas?

Fannie Mae requires a larger down payment, usually 10%, and has stricter credit and income requirements for second homes compared to primary residences.

Can I use Fannie Mae financing for a vacation property?

Yes, vacation properties can qualify as second homes if they’re not rented out for more than 180 days a year.

What requirements must I meet to qualify for Fannie Mae loans?

Strong credit, consistent income, a good debt-to-income ratio, and the property’s intended use all factor in.

Selling Your Home
What is the process for selling a home in Texas?
  • Prepare the home for sale.
  • Determine a competitive price.
  • List the property with an agent or platform.
  • Review offers and negotiate.
  • Proceed to closing.
How can I maximize my home's value when selling?

Stage the home, make necessary repairs, and effectively market it.

Are there tax implications when selling a primary residence?

Yes, but homeowners may qualify for a capital gains exclusion if specific conditions are met.

Buying a Home When Owing Taxes
Can I buy a home in Texas if I owe taxes to the IRS or state?

It’s possible, but tax liens or unpaid debts can affect your credit and loan approval.

How does tax debt impact the mortgage approval process?

Lenders may view it as a risk, potentially leading to higher interest rates or loan denial.

Are there strategies for managing tax debt while buying a home?

Work out a payment plan with the IRS, improve other areas of your credit, or consider a larger down payment.