There are four main factors that come into play when being approved for a mortgage:

CREDIT: Each loan program has different credit score requirement in order to qualify. Higher credit scores can allow you to qualify for lower interest rates and more options. We also look at your credit report and review your payment history and other factors that play into your approval.

INCOME: We look at what type of income and how much money you make on a monthly basis. Then we calculate a Debt-to-income ratio (DTI) by dividing your minimum monthly debt expenses by your monthly income.. Your debts should only make up a certain percentage of your income, because you’re about to incur a large and important debt by purchasing a home. We typically recommend that the new house payment is NO MORE than 25% - 35% of your monthly income.

ASSETS: Down payment and reserves. Some loan programs require you to make a down payment of a certain minimum amount. Plus we look at reserves and how much funds you will have available after closing. This can include gift funds or other non-liquid accounts like retirement.

PROPERTY: The property must meet several criteria in order to be approved including insurability, appraisal value, condition, title ownership, etc. All of these variables are mostly out of your control. You can be eligible for a mortgage but NOT necessarily to buy or refinance THAT specific home.

1 - Earnest money is typically 1% of your sales price.

2 - An option fee is typically $100 - $500.

3 - Property Inspections can run $350 - $700.

4 - Appraisals typically cost between $500 - $850. They are more expensive if you are outside of the major metropolitan areas or if it's a jumbo or investor loan with extra requirements.

So you'll need to plan to have ~$5,000 - $10,000 available in savings outside of your monthly budget in order to get started for a $350,000 - $750,000 home.

These are all examples of home loan programs that homebuyers can choose from. We offer all four of these, plus several more options. Let’s take a quick look at what makes each unique.

VA - Zero-down options AND no private mortgage insurance (PMI) requirement for veterans, active service members, and their surviving spouses plus competitively low interest rates

Conventional - Harder to qualify but more options for borrowers making a larger down payment with good credit, can avoid paying escrows and multiple private mortgage insurance (PMI) options

FHA - Low down option (3.5% minimum) but has mandatory mortgage insurance premium (MIP), lower rates than Conventional and easier to qualify. Popular with first-time homebuyers due to lower down payment requirements and higher ratios allowed

USDA - Zero-down options for rural borrowers - BOTH home and borrower must be eligible

NO!!!

VA and USDA loans can offer $0 down options, FHA loans offer as little as 3.5% minimum down payment and some Conventional loans offer as little as 3% down with private mortgage insurance (PMI).

We also offer down payment assistance options that can allow for little to no money out of pocket at closing. We have lots of options to fit different situations.

Lenders may have their fees structured or named differently from one another, but you should generally expect these:

Origination fee - most lenders charge ~$1,500 - $2,500

Document preparation fees

Appraisal fee

Attorney fee

Credit report fee

Third party processing fee

Prepaid items - homeowners Insurance and per diem interest

Escrows (if applicable)

Title company fees

County recording fee

After applying, you can ask your adviser for a loan estimate with fees included.

Yes, you absolutely can!

In fact, most people who access their home equity do so while they still have a mortgage.

Think of your home as a "savings account" that grows every time you make a payment or when the local housing market goes up. You don't have to wait 30 years to "withdraw" from it.

Here are the three most common ways to tap into that value:

1. Cash-Out Refinance (1st lien)

How it works: You replace your entire current mortgage with a new, larger one. The new loan pays off the old one, and you keep the difference in cash.

Best for: Accessing equity while also trying to get a lower interest rate on your primary loan, or if you only want one monthly payment instead of two.

The Catch: You’ll have to pay closing costs (typically 2% to 5% of the loan amount) all over again.

2. Home Equity Loan (2nd lien)

How it works: You receive a one-time lump sum of cash and pay it back at a fixed interest rate over 5 to 30 years. It is often called a "second mortgage" because you’ll have two separate monthly bills.

Best for: A specific, large expense where you want the predictability of a locked-in monthly payment.

The Catch: If you can't make the payments, both this loan and your primary mortgage put the home at risk of foreclosure.

3. Home Equity Line of Credit (HELOC) - typically in 2nd lien position

How it works: It’s like a credit card secured by your house. You're given a limit (e.g., $150,000) and you only pay interest on what you actually spend. Limited closing costs are also sometimes an option depending on the bank / lender.

Best for: Ongoing projects like a phased kitchen remodel or as an emergency "safety net."

The Catch: Most have variable interest rates, meaning your monthly payment can go up if market rates rise.

The "Rule of Thumb"

Most lenders and states require you to leave at least 20% equity in the home. TX law specifically requires 20% due to provision 50(a)6 that is built into the TX State Constitution.

Example: If your home is worth $400,000, TX law requires you to keep at least $80,000 (20%) untouched. If you only owe $200,000 on your mortgage, you have $200,000 in total equity—meaning you could potentially "withdraw" up to $120,000.

A VA Funding Fee is a one-time payment made to the Department of Veterans Affairs. It’s essentially the "cost of admission" for the VA loan program, helping to keep it running for future veterans without requiring taxpayer funding or monthly mortgage insurance.

Think of it as the VA's version of the FHA's mortgage insurance premium (MIP), but with one major perk: it’s a one-time fee, not a monthly bill.

1. How much does it cost?

The fee is calculated as a percentage of your loan amount. The rate depends on your down payment and whether you've used a VA loan before:

Purchase & Construction Loans (2026 Rates)

Down Payment | First-Time Use | Subsequent Use

0% to 4.9% | 2.15% | 3.30%

5% to 9.9% | 1.50% | 1.50%

10% or more | 1.25% | 1.25%

Refinance Note: For a "Streamline" refinance known as an Interest Rate Reduction Refinance Loan (IRRRL), the fee is a flat 0.50% regardless of previous use unless you are exempt.

2. Who is exempt?

Roughly one-third of VA borrowers don't have to pay this fee at all.

You are typically exempt if:

1 - You receive VA compensation for a service-connected disability (or are eligible to receive it).

2 - You are an active-duty service member who has received the Purple Heart.

3 - You are a surviving spouse receiving Dependency and Indemnity Compensation (DIC).

3. How do you pay it?

You have two main options for handling the fee:

1 - Roll it into the loan: This is the most popular choice. If your loan is $300,000 and your fee is $6,450 (2.15%), your total loan becomes $306,450. You won't pay anything upfront, but you will pay interest on that amount over time.

2 - Pay it in cash: You can pay the full amount at closing to keep your loan balance lower.

Seller Concessions: You can also negotiate for the seller to pay the fee for you (up to 4% of the Sales Price).

Quick Comparison: While an FHA loan has an upfront fee and a monthly fee forever, the VA loan has no monthly mortgage insurance. Over 30 years, this usually makes the VA loan much cheaper, even with the funding fee included.

Private Mortgage Insurance (PMI) is a type of insurance that conventional mortgage lenders require if you put down less than 20% of the home's purchase price.

It’s important to clarify a common misconception: PMI does not protect you. It protects the lender if you stop making payments on your loan. Because a smaller down payment represents a higher risk for the bank, PMI acts as a safety net that allows them to offer you a loan anyway. Think of it as foreclosure insurance for the lender.

1. How much does it cost?

The cost of PMI varies based on your credit score and your down payment amount. Typically, it ranges from 0.2% to 2% of your loan amount per year.

Example: On a $300,000 loan with a 1% PMI rate, you would pay $3,000 a year, or $250 per month.

2. How do you pay it?

There are three main ways PMI is handled:

1 - Monthly Premium: The most common method. It is added to your monthly mortgage payment alongside your principal, interest, taxes, and homeowners insurance.

2 - Upfront Premium: You pay the entire amount at closing in one lump sum.

3 - Lender-Paid (LPMI): The lender "pays" the insurance for you in exchange for giving you a slightly higher interest rate.

3. The "Light at the End of the Tunnel"

The best part about PMI (compared to FHA MIP) is that it is temporary. You can get rid of it in two ways:

1 - Automatic Termination: By law, your lender must cancel PMI once your loan balance reaches 78% of the original value of the home. This will be disclosed based on your amortization schedule.

2 - Request Cancellation: You can ask your lender to drop PMI once you reach 80% equity. This can happen through regular payments or if your home's value increases significantly due to market growth or renovations (though you'll likely need a new appraisal to prove it).

The Bottom Line: If you have a strong credit score, PMI is often cheaper than FHA MIP and, more importantly, it disappears once you've built up enough equity.

A Mortgage Insurance Premium (MIP) is a fee required for all FHA loans. Because FHA loans allow for lower down payments and lower credit scores, the FHA charges this premium to protect lenders in case a borrower defaults on the loan.

It is split into two distinct parts:

1. Upfront MIP (UFMIP)

The Cost: Always 1.75% of your total loan amount.

How it's paid: You can pay it in cash at closing, but most people "roll it" into the loan balance.

Example: On a $300,000 loan, the upfront premium is $5,250. If you roll it in, your new loan balance becomes $305,250.

2. Annual MIP

The Cost: Typically 0.55% of your loan balance for a standard 30-year mortgage with a minimum down payment. (Rates can range from 0.15% to 0.75% depending on your loan term and down payment).

How it's paid: Despite the name "annual," it is divided by 12 and added to your monthly mortgage payment.

Example: On that same $300,000 loan at a 0.55% rate, you would pay roughly $1,650 per year, or $137.50 extra per month as part of your regular payment.

How long do you have to pay it?

Unlike private mortgage insurance (PMI) on conventional loans—which drops off once you reach 20% equity—FHA insurance rules are stricter:

If your down payment was | You pay MIP for...

Less than 10% | The entire life of the loan

10% of more | 11 years

Pro-Tip: Many FHA borrowers plan to refinance into a conventional loan once they reach 20% equity. This is the most common way to get rid of the monthly MIP payment early.