Conventional Home Loans for Texas Buyers
Conventional loans are the broadest, most flexible home-financing option available in Texas. They are not backed by a government agency, which gives lenders more flexibility on property type, loan structure, and terms, and gives you access to a wider range of purchase prices, including homes above FHA and USDA limits.
For buyers with solid credit and at least 3% saved for a down payment on a primary residence, a conventional loan is typically the starting point. Move up to 20% down and private mortgage insurance (PMI) drops off entirely, reducing your monthly payment from day one.
Is a Conventional loan right for you?
- Buyers with a credit score generally in the 620 or above range who want the widest selection of loan structures.
- Move-up buyers or those purchasing a second home or investment property, where government-backed programs have stricter limits.
- Buyers who can put 20% down and want to avoid PMI from the start.
- Buyers who prefer a fixed payment for the life of the loan or want the flexibility of an adjustable-rate mortgage (ARM) with a lower initial rate.
How Conventional loans work in Texas
Texas has one of the most active conventional loan markets in the country, driven by the state's high population growth and steady home price appreciation across Dallas-Fort Worth, Houston, Austin, and San Antonio. The conforming loan limit for 2024 is $766,550 for a single-unit property in most Texas counties. Homes priced above that threshold move into jumbo territory.
In DFW and the Austin corridor, where median prices have risen considerably over recent years, many buyers find themselves close to or above the conforming limit. That threshold matters: crossing it changes the loan structure and typically the rate. We look at your specific purchase price and help you decide whether to stay under the limit, buy points, or move into a jumbo product.
Texas property taxes are among the highest in the country, with effective rates commonly running 1.6% to 2.2% of assessed value depending on county and municipality. A conventional loan payment quoted without taxes can look very different once the full PITI (principal, interest, taxes, insurance) number is assembled. We build in the real local tax estimate from the start so you are working with an accurate budget, not a pleasant-looking one that shifts later.
Private mortgage insurance on a conventional loan is cancelable once your equity reaches 20%, either through paydown or appreciation. That is a meaningful distinction from FHA, where the mortgage insurance premium (MIP) structure is different and has its own removal rules. If you are weighing conventional versus FHA, we run both side by side for your actual numbers.
What the Conventional program includes
- Fixed rates: 10, 15, 20, and 30-year terms
- Adjustable-rate options (5/1, 7/1, 10/1 ARM)
- As little as 3% down on a primary residence
- PMI cancels at 20% equity
- Single-family, condos, multi-unit (2-4), second homes
- Purchase and rate-and-term refinance
- Cash-out refinance available
- No upfront mortgage insurance premium
General parameters
These figures are illustrative starting points. Your actual loan terms depend on your credit profile, income, assets, property, and current market conditions.
- Minimum down payment
- 3% (primary residence, first-time buyer programs may apply)
- Conforming loan limit
- $766,550 (most Texas counties, 2024 limit)
- Credit score
- Generally 620+, better rates typically above 740
- PMI
- Required below 20% down; cancelable at 20% equity
- Terms available
- 10, 15, 20, 30 years fixed; ARM options
Apex Capital Mortgage, LLC (NMLS #2583932) supports Equal Housing Opportunity. This is not a commitment to lend. All loans are subject to credit approval, income and asset verification, and property appraisal. Rates, terms, and programs are subject to change without notice and may vary by borrower and property. Not all applicants will qualify. Information on this site is for general educational purposes and does not constitute financial or legal advice.
Conventional loan questions
- What credit score do I need for a conventional loan in Texas?
- Most conventional loans require a minimum credit score around 620, though lenders vary. Rates improve meaningfully in the 720 to 740+ range. If your score is below 620, an FHA loan may be a better fit while you build your credit profile.
- Can I avoid PMI on a conventional loan?
- Yes, if you put 20% or more down, PMI is not required. If you put less down, PMI is required but it is cancelable, either when you reach 20% equity through principal paydown, or sooner if your home's appraised value has increased enough to support an earlier removal request.
- What is the difference between a fixed-rate and adjustable-rate conventional loan?
- A fixed-rate loan locks your rate for the full term, commonly 15 or 30 years, so your principal and interest payment never changes. An adjustable-rate mortgage (ARM) has a fixed period, such as 5 or 7 years, then adjusts periodically based on an index. ARMs often have a lower initial rate, which can make sense for buyers who plan to sell or refinance before the adjustment window opens.
- Can I use a conventional loan to buy a home above the FHA limit in Texas?
- Conventional loans can go up to the conforming limit ($766,550 in most Texas counties for 2024). Above that, you move into jumbo territory, which is a separate product with different underwriting. Conventional loans are often the right middle-ground for buyers above the FHA loan limits who are not yet in jumbo range.
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