If you’re thinking about buying a house and using a mortgage lender, Texas just might be the place to do it in 2023. The housing market has been through ups and downs in recent years, but the Lone Star state has lower mortgage rates compared to the national average. So what does the future hold for real estate in Dallas, Austin, or Houston? Let’s take a look at some of the factors that could impact the market in 2023.

From Your Local Mortgage Lender: Texas Housing Projections in 2023

The economy is always an important factor in any market, and the same goes for housing. Even though inflation is still relevant, mortgage rates are slowly making a downward trend in 2023. This brings hope to potential buyers, as they can still get a great deal on their mortgage loan when working with a trusted real estate professional.

Housing Market in Recent Years

Mortgage rates and home prices in the United States were consistently rising in 2022. Prices are projected to continue rising due to current inflation pressures. This is a drastic difference from the lowest mortgage rates ever recorded in history back in January 2021. However, the housing market is constantly evolving, and it will vary from state to state.

Dallas, Austin, and Houston Market

With an affordable cost of living, the Texas housing market in Dallas, Austin, and Houston look promising for 2023. In fact, the median home price in Texas is cheaper than the national average, making it a prime location for relocation. Additionally, there are more job opportunities than ever before in this state, which could also lead to an increase in demand for homes.

Types of Mortgage Loans To Consider

Understanding the different types of mortgage loans available is essential in today’s housing market. You need to know all your options and which loan type works best for your situation when working with a mortgage lender.

Fixed Rate Mortgage (FRM) 

One of the most common mortgage loans is a fixed-rate mortgage, also known as FRM. As its name suggests, an FRM has a fixed interest rate for the entire term of the loan. The loans are typically 15 or 30-year contracts. That means that no matter what happens in the market over those 15 or 30 years, your interest rates will be consistent throughout.

This makes budgeting easier and less stressful because you know exactly what you’ll owe each month without any surprises. It also allows you to lock in a low-interest rate if rates are currently favorable.

Adjustable Rate Mortgage (ARM) 

An adjustable-rate mortgage, or ARM, is another popular type of mortgage loan. ARMs have variable interest rates that can change over time based on market conditions and other factors, such as inflation levels or economic growth forecasts.

This means that while monthly payments may start lower than with an FRM, they can increase over time if rates rise significantly during the life of the loan. This makes ARMs riskier than FRMs but could benefit borrowers if rates go down over time instead of up.

Federal Housing Administration Loans (FHA)

FHA loans are mortgages insured by the Federal Housing Administration. The FHA is a government agency designed to help people become homeowners even if they don’t have perfect credit or enough money saved up for a down payment yet.

FHA loans require smaller down payments on qualified houses and offer more relaxed credit criteria than conventional mortgages do. This makes them attractive options for people who may not qualify for traditional mortgages but still want to own their own home someday soon.

When Should I Buy a Home in 2023?

With the climate of today’s housing market, home buyers should start planning for a home sooner rather than later. With prices rising, buying a home in 2023 could save you money. Even though the housing market is always changing, there are still some good deals to be found in Texas in the coming year. The key is to research your options and consult with a mortgage lender before making any decisions.

First-Time Home Buyer Tips

Current Debt Situation

Before you even begin looking for a house, you must understand your current debt situation. You should get a copy of your credit report and review it in detail. Additionally, if you have any outstanding debts or loans, be sure to make all payments on time and try to pay them off as soon as possible. This will help improve your credit score and allow lenders to offer more favorable loan terms when you apply for financing.

What’s Your Budget?

It’s also important to establish a budget for yourself and figure out how much money you can realistically afford to spend each month on housing costs. This could include costs such as mortgage payments, property taxes, homeowners insurance, and repairs or upgrades that may come up over time. You don’t want to end up in a situation where you are unable to keep up with payments due to financial strain.

Down Payment Matters

Most lenders require that borrowers put down at least 20% of the total purchase price of their new home as a down payment. This amount must be accounted for in your budgeting process so that you’re not caught off guard when the time comes.

The size of your down payment will also affect the interest rate offered by lenders. The higher the down payment amount, the better the rate will likely be.

Preapproval Process

Before beginning your search for homes, go through the pre-approval process with your mortgage lender. This is where they assess your finances and determine whether or not they are willing to lend money towards purchasing your dream home.

Of course, this won’t guarantee that they will accept a specific application for a specific home. But it does give buyers more assurance when making offers. Preapproval can also increase your chances of securing financing successfully.

Research Home Styles and Areas of Interest

Once preapproved by lenders, it’s time to start researching different home styles and areas nearby where properties might fit into those categories. Visit open houses and read up on what amenities various neighborhoods offer. This way, when house hunting begins, you will know exactly what kind of place would best suit your lifestyle needs.  

Consult With a Mortgage Lender

Once all research has been completed, it’s important to consult with experienced mortgage professionals who can help guide buyers through the entire loan process. Working with knowledgeable mortgage lenders ensures buyers feel confident!

What To Look for in a Mortgage Lender 

A local mortgage lender will understand the Texas real estate market better than any other person. They can provide insight into the current housing market trends and explain how they will impact your home purchase in 2023. Additionally, a mortgage lender can help you find the best loan options for your new home purchase.

If you are a first-time homebuyer, consulting a mortgage lender is especially important. Purchasing a home is a big investment, and it is important to have reliable information at your disposal to make an educated decision. Furthermore, the housing market is constantly changing, so it is important to have an expert on your side who can help you stay up-to-date with the latest trends.

If you’re thinking about buying a house sometime in 2023, now is the time to start planning. With some research and forethought, you can find the perfect home for your needs in Texas. Schedule a free consultation with Guaranteed Rate Affinity to learn more about the options available to you that fit your budget and needs.