(Updated for 2022) If you’re a homeowner or home buyer in Texas, you’ve probably heard of homestead exemptions. Maybe that’s what brought you to our site. You’ve come to the right place! Below, you can learn all about Texas homestead exemptions, their basic requirements, and the application process.

What Is a Texas Homestead Exemption?

At its core, a Texas homestead exemption is basically a tax break for qualifying homeowners. It’s one of the many perks of buying and owning a home in the Lone Star State. A homestead exemption allows you to “write down” your property value, so you don’t get taxed as much.

As you probably know, residential property taxes are a major revenue source for the state of Texas. They help fund public schools, libraries, streets and roads, and more. They also compensate for the lack of state income tax. Texas is one of several states that do not impose a statewide income tax. As a result, they tend to lean more heavily on homeowners to generate necessary revenues.

And that’s where the Texas homestead exemption comes into the picture. The “residence homestead exemption,” as it’s officially known, is one of several tax breaks associated with homeownership. The state offers additional exemptions for military veterans, disabled persons, homeowners over 65, etc. But those are the subject of another article.

Click here for general information on homestead exemptions. Find your county here.

How Does the Standard Exemption Work?

Let’s talks specifics. Here’s how the basic Texas homestead exemption works. Section 11.13(b) of the state’s tax code requires public school districts to offer a $40,000 exemption on “residence homesteads” located within their districts. That’s legal jargon for a home that serves as a primary residence.

Other sections of the tax code offer similar exemptions:

• Section 11.13(n) gives taxing units the option to offer a separate homestead exemption of up to 20% of the appraised property value — but not less than $5,000.
• Section 11.13(a) requires a homestead exemption of $3,000 to be offered in those counties that collect flood-control or “farm-to-market” taxes.

The most common type of homestead exemption in Texas is the $40,000 reduction mentioned above, as outlined in section 11.13(b) of the state tax code.

So how does that exemption work?

Let’s say the local tax assessor or appraiser in your area determines that your home is worth $200,000. Under the standard Texas homestead exemption, you would be allowed to reduce the taxable value of your property by $25,000. So you would only be paying taxes on a $175,000 property value, versus $200,000. That could potentially save you hundreds of dollars annually.

Depending on where you live, you might have a separate exemption of up to $40,000. So this is something you’ll want to research at the local level, starting with your county’s tax website. Look for the “appraisal district” section of the website. That’s where you’ll find the homestead exemption rules and guidelines for your county, as well as any special requirements.

Prior to January 1, 2022, homestead exemptions could not be filed until the year after a home was purchased. As of 2022, homeowners may file for a homestead exemption immediately upon closing on their property, so long as an exemption has not yet been filed for that tax year.

Who Qualifies for It?

The good news is that there aren’t any strict qualification criteria for the general ($40,000) homestead exemption. You must have an ownership interest in the property and use it as your “principal residence.” In other words, you can’t use a homestead exemption on a second / vacation home. But that’s about it, as far as requirements go.

As it states on the Texas Comptroller’s website:

“A homestead can be a separate structure, condominium or a manufactured home located on owned or leased land, as long as the individual living in the home owns it. A homestead can include up to 20 acres, if the land is owned by the homeowner and used for a purpose related to the residential use of the homestead.”

Note: The general rules and procedures for a Texas homestead exemption come from state taxation officials. But the individual counties can implement them in different ways. So the exact requirements and exemption amounts can vary slightly from one county to the next.

Click here for general information on homestead exemptions. Find your county here.

How Do I Apply for It?

Applying for homestead exemptions in Texas is fairly straightforward, assuming you meet the basic eligibility requirements mentioned above. All you have to do is file a bit of paperwork.

The process can vary slightly from one county to the next. But in general, it works like this:

1. Visit the tax appraisal website for your county to find any specific instructions.
2. Obtain a copy of the “Application of Residential Homestead Exemption” (a.k.a., Property Tax Form 50-114) from your local appraisal district.
3. Complete the application with the required information about yourself and the property you’re claiming as a primary residence.
4. Submit the form in accordance with instructions provided by your appraisal district.
5. Provide any additional items your district might require (e.g., copy of driver’s license).
6. Follow up with your local appraisal district if you don’t receive any confirmation.

To learn more: If you have additional questions about this subject, you can refer to the “property tax exemptions” section of the Texas comptroller’s office. Their site offers more information on the topics covered above, along with a helpful FAQ section. You can find it with a quick Google search. You’ll also want to visit the “appraisal district” website for your particular county.

Have mortgage questions? Trinity Oaks Mortgage proudly serves the entire DFW Metroplex. Our experienced loan officers can answer any mortgage-related questions you have and guide you through the process. We look forward to hearing from you!

The post Homestead Exemptions in Texas: How They Work and Who Qualifies appeared first on Trinity Oaks Mortgage.

Home buyers across the Dallas-Fort Worth metro area will have a higher range of mortgage financing to work with in 2022, due to a recent increase in loan limits. Both conforming and FHA limits for the DFW area have been increased for 2022 in response to rising home prices.

What does this mean to you, as a home buyer and borrower? Read on to find out.

Dallas-Fort Worth Loan Limit Increased for 2022

Most of the mortgage loans available today have a maximum amount or limit for borrowers. This is true for conventional (or “regular”) mortgage loans, as well as the government-backed programs like FHA. Borrowers who wish to use a particular home loan program have to stay within these limits, with a few exceptions.

This can be a confusing subject if you’re new to it. So let’s take it one program at a time.

Conforming Loan Limit Increased to $647,200

A conventional mortgage loan is one that is not insured or guaranteed by the government. The term “conventional” is used to differentiate these products from the government-backed programs like FHA and VA.

Now let’s break it down further.

In terms of their size, conventional loans can either be conforming or jumbo.

• A conforming loan is one that meets the guidelines and parameters established by the Federal Housing Finance Agency (FHFA). It can be sold into the “secondary” mortgage market via Freddie Mac and Fannie Mae. It conforms to their standards, hence the name.
• A jumbo loan, on other hand, exceeds the conforming loan limit for the county where the home is located.  Therefore, it cannot be sold to Fannie or Freddie.

Federal housing regulators determine the conforming loan limits for the Dallas-Fort Worth area, and for the rest of the country. Subsequently in 2022, those limits will be going up due to rising home prices nationwide.

In November, the FHFA announced that “the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2022.  In most of the U.S., the 2022 maximum conforming loan limit (CLL) for one-unit properties will be $647,200, an increase from $548,250 in 2021.”

In 2022, the conforming loan limit for a single-family home in the DFW area is $647,200.

This applies to all counties within the Dallas-Fort Worth-Arlington metropolitan area (a.k.a., DFW metroplex). Collin, Dallas, Denton, Ellis, Hunt, Johnson, Kaufman, Parker, Rockwall, Tarrant and Wise counties all have the same conforming loan limit for 2022 — $647,200.

Jumbo Mortgage Threshold Going Up as Well

Home buyers with sufficient income can borrow more than the DFW conforming loan limit mentioned above. In industry lingo, this financing option is referred to as a “jumbo” loan.

In 2022, a jumbo loan in the Dallas-Fort Worth area is anything above $647,200.

Jumbo mortgage products tend to have stricter criteria, due to the larger amount being borrowed. Borrowers seeking a jumbo loan in Dallas must show that they have enough income to manage the monthly mortgage payments, along with other recurring debts. This is true for all mortgage loans, but the “bar” is typically set higher for jumbo loans due to their larger size.

Maximum FHA Loan Amount for Texas: $420,680

The Federal Housing Administration (FHA) loan program has its own unique set of loan limits. These mortgage loans are originated by lenders within the private sector, as with conventional. Unlike conventional mortgage products, FHA loans are insured by the federal government.

The Department of Housing and Urban Development (HUD) oversees the FHA program. In early December, HUD officials announced that the FHA loan limits for the DFW area — and most other counties across the U.S. — would be increased for 2022.

The 2022 FHA loan limit for the state of Texas will be $420,680, a slight increase from the 2021 limit of $411,700. That’s for a regular single-family home with only one residence. There are higher limits for duplexes and other multifamily properties.

Here are the DFW FHA loan limits for 2022, across all property types:

• One-family: $420,680
• Two-family: $538,650
• Three-family: $651,050
• Four-family: $809,150

As with the conventional caps above, these FHA limits apply to all counties across the DFW metroplex. That includes the counties of Collin, Dallas, Denton, Ellis, Hunt, Johnson, Kaufman, Parker, Rockwall, Tarrant and Wise.

In conclusion, the 2022 FHA and conforming loan limits for the Dallas-Fort Worth area, along with the revised jumbo loan threshold.

Learn more about the mortgage process. Contact a loan advisor today to take advantage of the loan limit increase.

The post Loan Limit Increased for 2022: Conforming, FHA and Jumbo appeared first on Trinity Oaks Mortgage.

We are so excited for TOM Talk Episode Six! Our President, Michael Kuentz interviews one of our Loan Processors – Ericka Thompson. Watch below – transcript added for ADA. We hope you’ll share these videos with your friends and tune in to learn more about our company and employees!

Transcript (Speakers: Michael Kuentz – President, Ericka Thompson- Loan Processor)

Words on screen; TOM TALK – POWERED BY TRINITY OAKS MORTGAGE

Michael Kuentz: Ultimately what I want to, what I’m, what I want to gain out of all of this is a more transparent, a healthier, you know, we, we were blessed to be named the number one place to work, but that’s a survey, right. I want to continue to see. It in action, not just on paper. I want to continue to see, you know, Ericka growing and developing in her career and, and then telling other people about this cause it’s truly the best game in town type thing.

Words on screen; TOM TALK – Let’s talk with… Ericka Thompson

Michael Kuentz: Hey, TOM family. Welcome yet again to another edition of TOM talk. And as I’m always excited each and every time I get to do this, I’m super excited because I haven’t seen Ericka in far too long. I feel like you know, when Ericka joined us, gosh, last year then COVID hit us. Right. And so it’s great to see her face and just get to talk with her.

But team we’re, we’re blessed to talk with Ericka Thompson today. Ericka is part of our operations team. And I’ve just enjoyed getting to know her, although it was short-lived when, when when we got to talk face-to-face and I learned about she’s like me, coffee is like you know, coffee has to be a certain way for us to drink it just right. Then you have your coffee the way you like it. Tell me about it. Tell us about your coffee.

Ericka Thompson: Well, I’ve changed now to a different. It’s I’m a woman and I’m allowed to change my routine. So, now I am taking it’s called elevate and it helps you with focus and to get started. And I add a little bit of dairy-free hazelnut to it.

And so it’s kind of, it’s really helped me. I’m not a morning person at all. So, it helps me to get going and to have more of a positive outlook.

Michael Kuentz: Good for you. That’s awesome. I know, I know that was a bit of a curveball, but I just recall that story of you and I meeting at the coffee.

Ericka Thompson: Yes. Seems like every morning.

Michael Kuentz: One of your first days, so, well, Hey tell us what you do for us.

Ericka Thompson: I am a loan processor for one of the greatest teams that I’ve ever worked with our leader, Kelly is awesome. And I think we have a great team of mature ladies. It makes a difference and no, not to younger people, but it just really makes a difference to work with more mature staff and you know, more understanding and we’re able to, you know, buckle down and know that we have a job to do so it’s been great.

Michael Kuentz: Yeah. That’s awesome. And you know you’re, you said it best right. Maturity in this industry is important. You know, you’ve got kind of the, been there, done that. You’ve seen it all. There are not many things that. That you haven’t been able to work through before and businesses that are growing need that type of maturity. But at the same time, what I love about it too, Ericka is when we do go and bring in. You know, folks that, you know, don’t understand that mortgage has two G’s in it, you become almost an immediate mentor because you’ve, you’ve been able, to work through all of those hurdles over the course of your career.

But I agree with you. We’ve got a tremendous, tremendous operations team in general and I was talking to Christine this morning about that as I. I feel like, you know, capacity where we’re looking good. Tenure, we’re looking good. Even folks that are growing up in the organization, they’re getting more confident and we’re starting to build some real stability and scalability too.

So. Yeah. So you’ve been with us for a year. And what a year that you joined, right. Had, I mean.

Ericka Thompson: I know.

Michael Kuentz: I mean here one, one minute, we’re in the coffee room and the next minute we’re remote. What have you experienced over the course of this last year?

Ericka Thompson: Well, I think the year has really taught me a lot.  As far as. The unknown and what you can and can’t handle. And then I’ve met a few new boyfriends along the way with the Amazon guy, the FedEx guy. Yeah.

Michael Kuentz: We know him by name don’t we?

Ericka Thompson: Yeah, I know him by name. Hey! The trucks that go down this street and during the beginning, my neighbor. On either side, one of us was getting a visit from one of those three companies every day, maybe from all three in a day. But yeah, it’s just really taught me of the unknown. And I’ve had so many friends who lost their jobs and to know that our business kept going was really a blessing because you think about the things that you were doing before that you could really do without.

You know, and it’s just really been a blessing. And so many lives were lost during that time. I’ve had friends in the beginning, it was kind of almost like, eh, it’s not real, it’s not going to happen. But then as time going around on Facebook, it would be, do you really know anybody who’s actually had COVID it took a few months.

I mean by the summer. And then surely by September, everybody knew somebody who had been affected by COVID in one way or another, whether there was a death or just being, you know, having tested positive from it. So it just really was an eye-opener and it taught us a lot of ways that we can do things whoever would have thought that so many things can be done via zoom or via video. There are so many adjustments that have been made.

Michael Kuentz: I agree. I, you know, it was we had to kind of trial by fire, right. Overnight. We go from a place where we liked coming into the office to now we need to make sure that we’re set up we’re secure. We’re able to do our jobs remotely, you know, in some respects.

I mean, I love the human interaction and I miss that on a more consistent basis. But in some respects, I think it forced our hand. To, to be ready for what the mortgage industry you know, is gonna move to, you know, more remote, more technology, more leaning on that, making our people better through the investment of technology.

And so I think in some respects, but you’re right, it was such a blessing to be. And essential business because there are so many folks who still to this day are trying to pick up the pieces. And so we can, we can thank our father for that. No doubt about it. Yeah.

Ericka Thompson: I think if this pandemic had happened 10 years ago, nobody would have been able to survive it. I don’t think technology just was not there. So I think God has his timing and everything. Even with this, you know, 10 years ago. It just would have wiped everything out. So everything is in his perfect time and I believe

Michael Kuentz: That’s good. I love it. So what is the, what’s the one thing that you wish you had known when you began your career?

Ericka Thompson: Oh, my gosh. I think, I mean, I started, I don’t want to date myself, but Kelly and I laugh about old things that we remember back in the beginning, but I think the main thing is to know that you can impact someone’s life either way, whether it’s, you know, getting them in that dream home. Or not being able to where you get, you know, halfway through the process or even at the end of the process.

And then something happens to where you’re not able to do that loan. And that’s happened to me several times, whether it’s a mistake on my end, companies end, or on the borrowers and where they go at the last minute and buy a home full of furniture and you don’t even have the house yet, or you, you know, you have a 30 day late and it just ruins the whole thing.

So, to know that you have someone’s life in balance and to have in the very beginning, I didn’t understand because I was not a homeowner, but having gone through the process yourself, it’s a whole different ball game you have. So your life is in limbo. You’re just waiting. You had your kids here, you got your husband.

You have movers, you have all this stuff, just laying in the balance, depending on this one transaction and you’re, their lives are in your hands and to not to be nonchalant about it is you just can’t be, it just can’t be. You have to put yourself in their shoes.

Michael Kuentz: Yeah, really it couldn’t be once again with our perfect timing of our Lord and savior. It’s you know, we just went through a rebranding, right? Trinity Oaks and, JHH went through a rebranding and our brand vision. Right. What you just talked about. It’s so critical that we’re joyful. We’re a hope-filled, loving guide throughout that because we’re in this business. We know it, we do it every day.

And sometimes, you know, we’re doing hundreds and hundreds and hundreds of these. But that one family on the other end is doing it one time, maybe three times in their life who knows. And we’ve got to remember that and we’ve got to be that joyful, hopeful, loving guide.

Ericka Thompson: And it takes a little bit of learning to get something out of a customer that you need. We want to hit our numbers.

Michael Kuentz: Yeah.

Ericka Thompson: They have their lives that they’re living and it may not be that important to them, but they still want to close. But they don’t realize, we need this, we need this. You know, you “Lady send me, what I need or you will not close,” but you gotta find better words to say it, you know, to get them to know the importance of it.

Because if you send it at the last minute and then we won’t meet your closing, but sometimes it just doesn’t seem that important to them.

Michael Kuentz: Who says you’re not in sales, right. You’re also, you’re making sure to keep the transaction moving and absolutely. And you’ve got to do it with balance and grace, all of that. So that’s good. So, what advice would you give to someone wanting to pursue a career in mortgage similar to what you’re doing?

Ericka Thompson: I think it takes a lot of organization and balance because you have to be able to have so many different things going on in your head. Oh, and one thing for sure, for sure. I learned the hard way you have to be able to turn it off.

At the end of the day, when it’s over, it’s over. I would find myself early on in my career laying in bed in the middle of the night and waking up, going ah! Did I do this? Did I do that? I mean, I would constantly be thinking about it and thinking about and thinking about it, but it took time for me to say, no, I can’t. I have to cut this off and now live my life over here. Not saying that you don’t still think about it.

Michael Kuentz: Yeah.

Ericka Thompson: But you have to, you’ve gotta be able to divide that up. Be organized enough in your day. And when you’re closing out your day, make a list of what you have to do that next morning, but then once you close it up, you’re on with your family.

Yeah. You have to make that time, your family, your, your husband, or your kids, or whomever. And if you don’t have that just for your life, you have to be able to make that separation. So that’s what I would tell somebody. Don’t get too caught up in. You know, the number of files that you’re doing, just so you make a bonus or whatever, you have to still be able to balance your life.

What good is making the money, if you’re not going to be able to enjoy it with your family?

Michael Kuentz: Amen. A hundred percent.

Ericka Thompson: Yeah. Yeah.

Michael Kuentz: So, what, what are some of the best resources that you have found or that helped you along the way while you’ve been in this business?

Ericka Thompson: I think staying in contact with. All the employees or managers that I’ve worked with to see how different companies are doing things, or they may have heard something new that’s coming down the line, or you may have had a scenario at a previous company 10 years ago, but you still have the contacts and you can call them and say, Hey, do you remember when XYZ happened?

How did we handle that? Or what would you do if this situation came about? So, it’s really helpful to keep those good contacts from past companies to fall back on or just to go back and, you know, see how they would handle a situation. Or even if you have a difficult situation with an underwriter on making a decision, it’s good to bounce an idea off of another underwriter with a different company to see how they would look at it. So, a lot of underwriting is based on their opinion of the situation. Anyway.

Michael Kuentz: Yeah, no, that’s, I, I love that because and that’s anything in life right. We want to, we want to learn from experiences. We want to take our history with us and be able to then build networks around that and be able to, I call it my bat phone.

You know, I’ve got five or six people that I, you know, that I can get on speed dial. And my hope is I add value to them, but I know they add value to me. But you got to build that network. It’s so critical, so important because it can help you grow and develop. It can help us get deals across the finish line.

Maybe we didn’t think we could and help that family that we weren’t quite sure or not. So that’s really good, Ericka. That’s good. Well, I have to tell you, I’ve enjoyed this. I really, really have enjoyed seeing you. It’s been too long.

Ericka Thompson: Yes.

Michael Kuentz: And I look forward to the day that we can get at least maybe a few days in the office here again. But it’s a, it’s a real pleasure having you on this team. It really means the world to me to have you guys and you’re doing a great job obviously, and I look forward to just great things, for you and your time here. And great things for Trinity Oaks Mortgage.

Ericka Thompson: Thank you. I really enjoyed my time here and the people that I work with, most of all.

Michael Kuentz: Amen to that.

Words on screen; TOM TALK – Thanks for watching!

Words on screen; TOM TALK – Connect with us on Facebook, Twitter, Instagram, and YouTube.

END OF TRANSCRIPT

Here at Trinity Oaks Mortgage we love being your lender! When dealing with your home financing, we are not only working with one of your largest personal financial investments; we also are handling one of your biggest dreams. Since we work with matters so close to the heart, we serve you from ours. Contact one of our loan advisors today – click here.

Connect with us on Facebook, Twitter, Instagram or Youtube.

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What makes Trinity Oaks Mortgage different from all of the other mortgage companies out there? Among other things, love. You’ll find that word within our core values. It’s the centerpiece for all that we do.

You don’t hear the word “love” used a lot within the mortgage industry. Many lenders focus on the bottom line, the nuts and bolts, the dollars and sense. Sure, those things matter. But we believe you deserve a lot more from your mortgage provider.

As a borrower, you want to succeed with your financing goals. That’s probably first and foremost in your mind. You want a good interest rate, a streamlined lending process, and an affordable monthly payment. In other words, you want to make a smart investment. And we can check all of those boxes for you.

At the same time, we believe you deserve more than these bare-minimum requirements. You deserve to work with a company that’s truly invested in your long-term financial success, a company that cares about you. That’s what you’ll find at Trinity Oaks Mortgage.

We strive to create lifelong relationships with each and every one of our clients, supporting you through the home-buying process and beyond. We will work closely with you to create a home financing strategy built around your specific needs and goals. That’s just one of the ways we show love to our clients.

Our core values drive us, day in and day out, to create a one-of-a-kind, world-class mortgage experience for our clients:

• Generous love
• Honest communication
• 2nd mile service
• Relentless pursuit of excellence

Generous Love

Our first of the 4 core values is Love. It’s an integral part of our company philosophy and central to how we conduct business. It’s how we treat people in general, both in and outside of our company.

There are many ways to show love, even within the context of a mortgage transaction. We show our employees and clients love through our actions, our time, and our talents. We want everyone we deal with to know they are loved and valued.

Honest Communication

Communication is a vital part of the home buying and mortgage process. There are many people involved with the process, and a lot of “moving parts.” Effective communication is the glue that holds it all together.

Over the years, we’ve learned the value of open and honest communications within the finance world. We take it so seriously that we’ve incorporated it as one of core values. If you use Trinity Oaks Mortgage for your home financing needs, you’ll enjoy honesty and communication through every step of the process.

2nd Mile Service

At Trinity Oaks Mortgage, we live to serve others and go the extra mile to accomplish that goal. That’s what this core value is all about. We deliver a “2nd mile service” by exceeding our customers’ expectations in every way possible. We encourage our team to spend extra time and make the extra effort for the benefit of our treasured customers.

Relentless Pursuit of Excellence

Our last of the 4 core values is “Relentless Pursuit of Excellence.” You’ve probably heard the expression: “There’s always room for improvement.” This is a great philosophy that can be applied to everything from sports to business to personal development. At Trinity Oaks Mortgage, we apply this concept to every aspect of our business.

We encourage our team members to strive for excellence in all they do. Among other things, this means we must be open-minded and willing to adapt to changing circumstances. As a customer, you’ll benefit from this directly. From application to closing and beyond, you’ll receive excellent care from the entire team at Trinity Oaks Mortgage.

Have questions? Trinity Oaks Mortgage offers a wide variety of home loan options, including FHA. Please contact us if you have questions about the FHA loan requirements in Texas, or other mortgage-related topics.

Connect with us on Facebook, Twitter, Instagram or Youtube.

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FHA loans are a popular financing option among home buyers in Texas. This program appeals to first-time buyers in particular, especially those with limited funds in the bank. FHA loans offer several key advantages, including a relatively low down payment of just 3.5%. As with all mortgage programs, there are certain guidelines and FHA loan requirements in Texas. Below, we will examine some of the minimum requirements for this program.

Minimum FHA Loan Requirements in Texas

Federal Housing Administration (FHA) loans are originated by mortgage lenders in the private sector, just like most other types of mortgage loans. Insurance is what makes the program unique. The federal government partially insures FHA loans, and that’s what distinguishes them from conventional or “regular” mortgage products.

The Federal Housing Administration falls under the Department of Housing and Urban Development (HUD). Among other things, HUD establishes the minimum guidelines for this mortgage program. Here are the basic eligibility FHA Loan Requirements in Texas.

Minimum Down Payment

Borrowers who use this program to buy a home must put down at least 3.5% of the appraised value or purchase price. That’s one of the key benefits offered by the FHA loan program. It allows for a relatively low down payment, reducing one of the hurdles to homeownership.

The down payment money doesn’t necessarily have to come out of your own pocket. When using an FHA loan to buy a home in Texas, you could obtain some of your down payment funds from a third-party donor. Family members and other approved sources can contribute money to your minimum required down payment — another big advantage.

But there are requirements for this as well. Down payment gift money must be thoroughly documented. The person providing the funds must submit a signed letter stating that they do not expect any kind of repayment.

Credit Scores

Credit scores are another important requirement when using a Texas FHA loan. Your credit score shows how you have borrowed and repaid money in the past. It’s based on information contained within your credit reports.

People who typically pay their bills on time tend to have higher scores, while those with a pattern of late or missed payments often have lower ones.

When it comes to the credit score requirements for Texas FHA loans, there are two important numbers you should know about — 500 and 580. According to HUD, borrowers must have a credit score of 500 or higher to be eligible for the program. To take advantage of the popular 3.5% down payment option mentioned above, borrowers must have a score of 580 or higher.

Debt-to-Income Ratios

When applying for a mortgage loan in Texas (whether it’s FHA, conventional or VA), you’ll probably encounter the term “debt-to-income ratio.” As the name suggests, this ratio compares your gross monthly income to your recurring monthly debts. It’s a risk-assessment tool.

Having a lower debt-to-income ratio can increase your chances for qualifying for an FHA loan in Texas. A higher-than-average “DTI” ratio can have the opposite effect, especially if it rises above the 50% mark. The goal here is to ensure that you, the borrower, are not assuming too much additional debt by taking on a home loan.

The debt-related requirements for Texas FHA loans are somewhat flexible. HUD allows for higher debt ratios in cases where the borrower has “compensating factors,” like extra cash reserves in the bank. Please contact us if you have questions about this or any other FHA loan requirement covered in this article.

FHA Loan Limits in Texas

Lastly, we have loan limits. When using an FHA-insured mortgage to buy a home, you’ll have to meet the loan limit requirements for your particular county. These limits represent the maximum amount you can borrow through this program.

Loan limits can vary from one county to the next, because they’re based on median home values. In 2021, the FHA loan limit for most Texas counties is $356,362. In pricier counties, like those that fall within the Austin metro area, the limit is currently set at $416,300. The Dallas-Fort Worth area has a limit of $416,300 in 2021.

Note: These figures apply to single-family home purchases in particular. There are higher caps for multi-family properties, such as duplexes and triplexes.

Have questions? Trinity Oaks Mortgage offers a wide variety of home loan options, including FHA. Please contact us if you have questions about the FHA loan requirements in Texas, or other mortgage-related topics.

The post FHA Loan Requirements in Texas: Updated for 2021 appeared first on Trinity Oaks Mortgage.

With the end of the year fast approaching, a lot of home buyers in the Dallas metro area are looking ahead to 2021. And many of them share the same overriding question. Will 2021 be a good year to buy a home in the Dallas-Fort Worth area?

From a market standpoint, now could be a great time to make a purchase. Those who postpone their home-buying plans until later in 2021 could encounter higher housing costs. So an argument could be made for buying sooner rather than later.

Understanding current housing market trends can help you answer this question. So let’s take a look at where the market is now, and where it might be going in 2021.

Dallas-Fort Worth Home Prices Rose Steadily During 2020

The Dallas-Fort Worth real estate market showed surprising strength throughout 2020. In the early days of the coronavirus pandemic, some feared that the real estate market might experience a downturn. Instead, home-buying activity continued at a steady pace.

According to a recent report from the MetroTex Association of Realtors, the median home price across the Dallas-Fort Worth area rose by nearly 13% from November 2019 to November 2020. That’s remarkable, when you consider the fact that we were dealing with a pandemic and economic slowdown during much of that period.

This relates back to the question at hand: Will 2021 be a good time to buy a home in Dallas? From an investment standpoint, the answer for many folks is yes. Home values in the area have shown resilience over the past year, due to strong demand from buyers. So it’s logical to assume that prices will continue to hold up going forward.

In a December 2020 press release, the research team at Realtor.com predicted that the median home price for the Dallas-Fort Worth-Arlington metropolitan area would rise by around 4.4% during 2021. Analysts from Zillow made a similar prediction, suggesting prices in the DFW area could rise by more than 5% over the next year or so.

So a sense of urgency might be warranted, among home buyers. Those who make a purchase earlier in 2021 could shield themselves from higher costs down the road. According to the Realtor.com report mentioned earlier:

“Buyers will need to act with a sense of urgency if they want to lock in a low rate before home prices increase even more in 2021.”

Speaking of low rates, that’s another reason why 2021 could be a good year to buy a home in the Dallas area.

Mortgage Rates Hovering at Record Lows, for Now

During the latter half of 2020, mortgage rates dropped from one record low to another. According to the weekly survey conducted by Freddie Mac, the average rate for a 30-year fixed mortgage was 2.71% for the week of December 10, 2020. That was the lowest average in more than 50 years. From an interest-rate standpoint, right now is a great time to buy a home in the Dallas-Fort Worth area.

Unfortunately, we can’t say with certainty how long this low-rate environment will last. Home buyers today can benefit by locking in some of the lowest rates we’ve ever seen. But that could change over the coming months.

In their mid-November forecast, the Mortgage Bankers Association predicted that 30-year mortgage rates could average 3% during the first half of 2021. Beyond that, they expect rates to creep up slightly. If this forecast proves to be accurate, it means that Dallas-area home buyers could encounter higher home prices and higher rates during the latter part of 2021.

Summary: A Good Time to Buy in 2021

We’ve covered a lot of information in this report, because we believe in keeping home buyers well informed about current market conditions. Here are five important takeaways:

• Home prices across the DFW metro area rose steadily during 2020.
• Forecasters are predicting a continuation of this trend going into 2021.
• Home buyers who purchase over the coming months could face higher prices.
• Mortgage rates are currently hovering at historically low levels.
• For many reasons, 2021 could be a good year to buy a home in the Dallas area.

Have mortgage questions? Trinity Oaks Mortgage proudly serves the entire DFW Metroplex. Our experienced loan officers can answer any mortgage-related questions you have and guide you through the process. We look forward to hearing from you!

The post Will 2021 Be a Good Year to Buy a Home in the DFW Area? appeared first on Trinity Oaks Mortgage.

Summary: The Dallas-Fort Worth metro area has a sizeable military population. As a result, there are many home buyers in the area who could benefit from using a VA-guaranteed home loan. The VA loan program offers many benefits for Dallas-area home buyers. Today, we’ll examine 5 VA Loan Benefits .

Most military members and veterans in the Dallas area are eligible for the VA loan program. It’s open to just about anyone who has served in the military, under honorable conditions. And there’s a lot to like about this program.

Congress created the Department of Veterans Affairs (VA) home loan program in the 1940s, to reward servicemembers in the wake of World War II. It has been going strong ever since. Today, VA loans give home buyers the ability to purchase a property with no money down. But that’s just one of the benefits.

Benefit #1: You could buy a home with no down payment.

If you use a VA loan to buy a home in the Dallas area, you could potentially finance 100% of the purchase price. In other words, you could buy a house with zero money down. This is arguably the biggest benefit to using the VA loan program.

Numerous surveys over the years have shown that the down payment is the biggest obstacle to homeownership. But in many cases, it’s only a perceived obstacle. In 2018, a joint report from the Urban Institute and Freddie Mac stated:

“Yet most potential homebuyers are largely unaware that there are low down payment and no down payment assistance programs available at the local, state, and federal levels to help eligible borrowers secure an affordable down payment.”

For decades, the VA loan program has enabled military members and veterans to buy a house with no money down. So much for that obstacle.

Benefit #2: You could avoid paying mortgage insurance.

Home buyers in the Dallas area who put down less than 20% on a home purchase usually have to pay for mortgage insurance. These specialized insurance policies are often required when the loan-to-value (LTV) ratio rises above 80%.

This is another major benefit of using a VA loan. Borrowers who use this program can typically avoid paying mortgage insurance — even when they put no money down. As it states on the Department of Veterans Affairs website: “With a VA loan, you also avoid steep mortgage insurance fees.” All of this translates into a more manageable monthly loan payment.

Benefit #3: Seller concessions and closing cost contributions are allowed.

The VA loan program also allows sellers to contribute money toward the home buyer’s closing costs and other fees. This gives you, the buyer, more flexibility when it comes to negotiations. It could also save you thousands of dollars in out-of-pocket costs.

Within the context of VA loans, a “seller concession” occurs when the person selling the property helps cover a cost that the buyer would normally pay. For example, the seller might agree to pay the buyer’s VA loan funding fee, mortgage discount points, or other costs.

In addition to these concessions, the home buyer can also ask the seller to pay some or all of their closing costs.

Granted, these things are “market dependent.” In a slower real estate market, sellers are generally more willing to contribute to the buyer’s costs. While in a hot market, they might decline such a request. (Seek your real estate agent’s advice on this subject.)

Benefit #4: VA loans offer competitive interest rates.

DFW home buyers who use VA loans to buy a house can also benefit from competitive mortgage rates. According to a study conducted by Polygon Research, borrowers who use the VA program tend to have the lowest interest rates and origination fees of all the different mortgage types. To measure this, the research firm analyzed data collected under the Home Mortgage Disclosure Act (HMDA).

To quote their November 2020 report:

“From HMDAVision® [an analysis tool] we see that VA loans in fact on average had the lowest interest rates in 2019 — both for all VA loans, and for the home purchase subset.”

It’s also worth noting that mortgage rates are currently hovering at historically low levels, regardless of mortgage type. On December 17, Freddie Mac reported that the average rate for a 30-year fixed home loan had fallen to 2.67%. That was the lowest average in more than 50 years, to date.

Mortgage loan interest rates can vary from one borrower to the next, for a number of reasons. But it’s good to know that our deserving military members and veterans often qualify for some of the lowest rates available.

Benefit #5: You don’t need perfect credit to qualify.

VA mortgage loans are partially guaranteed by the federal government. That’s what makes this program unique, when compared to conventional or “regular” home loans. As a result of this government backing, the program offers flexible qualification criteria for borrowers.

In conclusion, you don’t need perfect credit to qualify for a VA loan in the Dallas area. The most important thing is that you have steady and stable income, enough to cover your monthly payments and other recurring debts. Share these 5 VA Loan Benefits for DFW Area Home Buyers to your fellow veterans!

Learn more about the mortgage process. Contact a loan advisor today to take advantage of the loan limit increase.

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