Top Mortgage Lenders in Abilene, TX

Purchasing a home in Abilene, TX, is one of the most exciting experiences you’ll ever have.

But, unfortunately, it’s also most likely the most costly. And if you don’t have a swimming pool full of cash, you’ll need to get a mortgage to assist in financing the purchase of a home.

Applying for a mortgage in Abilene, TX, can be a stressful experience, especially if it’s your first time. The good news is that by following these five tips, you’re on your way to getting the best mortgage deal in Abilene, TX.

Ready to apply for a home Loan? I’m a licensed mortgage loan officer serving Abilene, TX and I’d love to help you get pre-approved for a home. Call or text me at 325-261-0265 if you’re ready to get started or if you have any questions.

5 Tips for Getting the Best Mortgage Loan in Abilene, TX

1. Check your credit

Before examining your house buying alternatives in Abilene, TX, you should determine your credit score. Begin by requesting credit reports from the three major credit bureaus: Experian, Equifax, and TransUnion.

The simplest way to accomplish this is to go to annualcreditreport.com, the only website authorized by federal law to provide free credit reports once a year.

Next, go over your reports to make sure there are no inaccuracies or accounts reported that aren’t yours that may have harmed your credit.

Finally, check the accuracy of your personal information, such as your name, address, and Social Security number. Your credit score will influence the types of loans you are eligible for, the amount of money you may borrow, and your interest rate.

2. Make a budget

Use a mortgage calculator to discover how much house you can afford in Abilene, TX. It would be best if you also considered the cost of property taxes, homeowner’s insurance, maintenance, furniture, and utilities.

3. Know your Loan Choices

You can ensure that the lender you choose offers the best form of loan for you by researching your loan options before applying. The following are examples of mortgage loans available in Abilene, TX:

• Fixed-rate mortgages
• Adjustable rates mortgages
• Government-backed loans
• Construction loans
• Jumbo loans

4. Shop Around for a Mortgage Lender

When looking for a mortgage in Abilene, TX, you don’t have to go with the first lender you speak with.

One lender may offer you a lower interest rate than another. Choosing the best mortgage lender and loan offer involves some study and patience to guarantee you’re getting the most fantastic bargain.

The mortgage interest rate you choose will significantly impact the entire cost of your loan. Even a percentage point can build up to a significant change over time.

For example, assume you borrow $200,000 at 4.25 percent for 30 years. You’d end up paying a total of $154,197 in interest over the life of the loan. If your rate were 3.50 percent instead, you’d pay $123,312 in interest, saving $30,885 over the same 30 years.

In addition to the interest rate, consider closing charges, origination fees, mortgage insurance, discount points, and other fees that can add thousands of dollars to your loan.

5. Prepare your documents

Find out what documents you’ll need to apply for a mortgage in Abilene, TX, and gather them before meeting with a lender. Documents that are often required include:

• Tax returns
• Pay stubs, W-2s, or other proof of income
• Bank statements and additional assets
• Credit history
• Gift letters
• Photo ID
• Renting history

What Credit Score Do I Need to Get a Mortgage in Abilene, TX?

Your credit score is the starting point for lenders, and if it isn’t high enough, it could also be the endpoint.

Most lenders want a credit score of 680 or above to begin discussing a mortgage. It is conceivable to obtain one with a lower score, but it would be a stretch to expect a conventional loan from a bank or online lender.

A credit score of 680 to 750 will result in a lower interest rate, while anything above 750 will yield the lowest interest rate.

If you’ve had problems with your credit and your score is below 680, you can still get a home loan, but it will cost you extra.

VA loans are only available to military families and require a credit score of at least 620. Credit scores of 620 or above are also needed for USDA house loans for low- and moderate-income dwellings in rural areas.

Consumers with credit ratings as low as 580 can apply for loans through the Federal Housing Administration.

What Income Do I Need to Qualify for a Mortgage in Abilene, TX?

The importance lenders place on the debt-to-income ratio is the most shocking component of how to secure a mortgage.

Fair Isaac Corporation (FICO), the industry leader in credit ratings, polled lenders who stated that a high debt-to-income ratio is the most common reason mortgage applications are declined.

The unsurprising news is that most people have no idea what a debt-to-income ratio is. It is the ratio of monthly debt payments (credit cards, auto, student, and personal loans, store credit accounts, and any loans you co-signed) to your gross income. Lenders use it to assess your ability to make mortgage payments.

For example, if you earn $4,000 per month and pay $1,500 for credit cards, $300 for a car loan, and $200 for a student loan, your debt-to-income ratio is 50% (2000 4,000).

A reasonable consumer debt-to-income ratio is 36 percent, but conventional mortgage lenders (banks, credit unions, and internet sources) like to see that number under 30 percent. Take note that the ratio includes your expected monthly mortgage payment.

The debt-to-income ratio maximum for FHA is 28 percent, which is still significantly less than the proposed values for mortgage applicants.

The federal government states that the maximum ratio for a qualified conventional mortgage is 43 percent. However, most lenders recommend a debt-to-income ratio of 36% or less.

If you have a high debt-to-income ratio, you should look for strategies to boost your monthly income while also paying off debt.

For example, getting a second job, doing freelance work, or asking for a raise at your principal employment might alleviate the money issue. In addition, cutting back on all expenditures so you may use more money to pay down credit cards, vehicle loans, student loans, and other monthly expenses would help with debt troubles.

How to Look for a Mortgage Lender in Abilene, TX

Mortgage lenders in Abilene, TX, differ in their home loans and the interest rates and fees they charge. As a result, the best lender for one person may not be the most outstanding lender for another.

Before looking for mortgage lenders in Abilene, TX, organize your money and educate yourself on the many forms of mortgages. Then, compare lenders who provide the products and services you require.

Here are five pointers to assist you in locating the best mortgage lender in Abilene, TX.

Prepare your finances. You’ll be able to get the best mortgage rates if you have a decent credit score and a low debt-to-income ratio.

Discover which mortgage is best for you. There are numerous mortgage options available. Understand your options and hunt for lenders who provide what you require.

Compare mortgage rates from various lenders. Online, you can look for the best mortgage rates.

Obtain a mortgage pre-approval. Getting pre-approved shows sellers and real estate agents that you’re a serious buyer.

Compare loan quotes from at least three different lenders. The loan estimate specifies the loan terms and calculates the monthly payment, fees, and closing costs.

Frequently Asked Questions

How much house can I afford?

Making a budget is the first stage in the home-buying process. Consider how much you earn and how much you spend each month (on debt, savings, retirement, college funds, etc.).

Most experts recommend consuming no more than 30% of your gross monthly income on your mortgage. Taxes, insurance, and any necessary HOA payments should also be included.

Take advantage of online home affordability calculators in determining how much you should spend on a home.

How do I get pre-approved for a mortgage?

A mortgage pre-approval is a lender’s offer to lend money to the buyer based on particular financial circumstances and terms.

Begin by gathering the documentation required by your lenders, such as a copy of your Social Security card and recent W-2 forms, pay stubs, bank accounts, and tax returns.

After that, the lender you choose will walk you through the pre-approval procedure.

How much money do I need for a down payment?

The greater your down payment, the less you will have to finance when purchasing a property.

Making a down payment of at least 20% on a conventional mortgage will keep you from having to pay private mortgage insurance.

The needed minimum down payment varies depending on your mortgage type. The median down payment for first-time buyers in 2019 was 6%.