Maybe you are buying your first home in Texas, or perhaps you're relocating to Texas from another state. Then again, you may be a long-time Texas resident who is looking to either refinance your current mortgage or take out a home equity loan for home improvements. Regardless of your situation, it's important that you educate yourself on Texas home loans before shopping for a home and/or mortgage. This article explains what you will need to know before seeking a home loan in Texas:

The median price of a home in Texas is $211,500. Recently, homes in Texas have been appreciating at rates well above the national average. As a result, income levels in many parts of Texas are too low to purchase a median-priced home with a conventional loan. Although average interest rates in Texas are below the national average, Texas has one of the lowest levels of home affordability in the nation.

In Texas, before a buyer submits an offer on a home, their real estate agent is required to present them with a completed Real Estate Transfer Disclosure Statement. This document, completed by the seller of the property, requires the seller to name all of the property that will be included in the purchase (refrigerator, stove, alarm system, etc.) and rate certain aspects of the conditions of both the included property and of the house itself. This document requires the seller to disclose any potential problems or hazards that may discourage the buyer from putting an offer in on the home.

Texas's Civil Code Provision of the Real Estate Act regulates the issuance of variable interest rates for the purchase of real estate. Therefore, borrowers who are issued large mortgage amounts are guaranteed a fixed rate mortgage. Texas law also prohibits the charging of interest more than one day prior to the recording of the mortgage even if the borrower received the loan prior to that time.

In July of 2002, Texas law enacted a set of anti-predatory lending laws in order to help protect Texas homebuyers from predatory lenders. Some of the provisions of this new set of laws include the prohibition of a lender charging points and fees in excess of 6% of the total principal financed amount, the prohibition of a mortgage company issuing a loan to a borrower in an amount that the borrower could not reasonably afford to repay, and the prohibition of the financing of single-premium credit insurance, among others.

If you're buying a home in the state of Texas, you qualify for both federal and state FHA, USDA, and VA loans. First-time home buyers qualify for Texas FHA loans with below-market interest rates, and, depending on their eligibility, may also qualify for a loan in order to cover down payment and/or closing costs. Teachers and other professionals who work in an educational capacity may qualify for Texas's Extra Credit Teacher Home Purchase Program, a down payment assistance loan with forgivable interest.

In addition to FHA loans, the state of Texas also offers comparable programs to persons with disabilities or persons who live with and care for persons with disabilities. The state also offers several unconventional loans designed to aid homebuyers with the costs of their monthly mortgage payment. For example, Texas's Interest Only PLUS loan provides qualified homebuyers with a 100% financing 35-year loan that only requires payments toward the accrued interest on the mortgage for the first five years of the loan -- borrowers do not have to pay toward the principal amount borrowed until after the first five years. The individual requirements of each of these loans vary depending on the county in which you are buying a house. Specific requirements can be obtained through the Texas Housing Finance Agency.

Last Updated: Friday, November 21, 2008

Texas Real Estate Market View updated Friday, November 21, 2008 Housing & Social Facts Texas United States Total housing units 9,026,011 n/a Owner-occupied housing units 64.7% 66.9% Renter-occupied housing units 35.3% 33.1% Vacant housing units 11.6% 10.8% Average Home Value $106,000 $167,500 Average Mortgage Payment $1,220.00 $1,295.00 Average Rental Payment $379 .00 $388.00 Total Population 22,270,165 n/a Percentage Male 49.4% 49.0% Percentage Female 50.6% 51.0% Median Age 33.2 36.4 Under 5 years 8.4% 7.0% 18 years and over 71.7% 74.6% 65 years and over 9.6% 12.1%

1 Year Market Value Change for Texas 1yr | 5yr | 10yr

Popular Texas Cities and Towns

Location	Population	Median Family Income (2005)
Abilene	115,930	$33,007
Amarillo	173,627	$34,940
Arlington	332,969	$47,622
Austin	656,562	$42,689
Beaumont	113,866	$32,559
Brownsville	139,722	$24,468

Mortgage Type	Today	Last Week	Change
30 yr fixed	6.03	6.24	0.035%
15 yr fixed	5.47	5.72	0.046%
5/1 ARM	5.34	5.43	0.017%
3/1 ARM	5.48	5.42	0.011%

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Peter Miller is the author of the Common Sense Mortgage and has been featured on such media outlets as Oprah, The Today Show and CNN. His columns now appear in leading real estate media including the Real Estate Professional and RealtyTimes.com.