Finance > Mortgage / Debt

Conventional Loan Requirements in Texas: Things to Get Started Mortgage Process

Purchasing a home loan means heaps of struggles. For many, requirements sound Greek to them. But there is no easy way out – you must have full knowledge of requirements and guidelines to experience the most hassle-free mortgage experience. Especially when you want a home loan, you could only think of conventional home loans. Putting down only 3% of the loan amount and having a 620 credit score requirement are the basics of a conventional mortgage. Since these loans are popular, they are abundantly available. From banks to private lenders, anyone can help you with conventional mortgage financing.

But none of the government agencies finance the conventional loan. Lenders sell Freddie Mac or Fannie Mae which are government-financed enterprises. The GSEs make sure financing is widely and easily available to everyone. Now, you have to remember that the GSEs are in charge of determining the conventional loan requirements Texas. These enterprises follow a less-stringent guideline – it’s indeed a great relief for borrowers.

In this article, we mention the conventional loan requirements in the simplest words.

Down Payment

You might have thought there was no way out other than putting 20%, but the reality is a lot different. It is completely alright if you put down as little as 3%. Conventional 97 loan, Freddie Mac Home Possible loan, and Fannie Mae HomeReady loan – these three types ease your road to the conventional loans with a 3% down payment. But putting down 5% might incur private mortgage insurance. You can put down 20% if you want to avoid PMI.

But this does not necessarily mean you have to put in a 20% down payment. For those who want to get rid of private mortgage insurance as soon as possible, it’s a great choice. PMIs tend to increase mortgage payments.


The DTI ratio indicates how much of the total income adds up to the debt payment every month. If you have auto loans, student loans, or credit card debts, the DTI ratio reflects it. If you can keep up a DTI ratio of less than 36%, you are in the clear. When your credit score is already around 700 and your DTI ratio is above 36%, you should go for a smaller loan.

On a concluding note, conventional loan requirements Texas are not exactly super difficult to fulfill. Every lender has a set of requirements of his own. So, talk to a lender now!

Joan Galardo


Residential Commercial Mortgage Loan Originator at Clear Lending.

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