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What Is The Average Mortgage Payment In Houston, TX?

August 8, 2022 | By Texas United Mortgage

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Houston is a great city to call home. And when you're looking to purchase a home here in Houston, it's important to know what the average mortgage payment in Houston is. That way, you can budget accordingly and make sure that you're able to afford the monthly payments.

To help you get your footing, we'll cover the factors that affect your monthly mortgage payment. So whether you are just starting your search for a new home or are already in the process, be sure to read this post!

What affects my monthly payment?

Instead of just focusing on the purchase price of your home, a savvy buyer considers their final monthly mortgage payments. This is the amount you'll need to budget for in order to go about your daily life.

However, there are a few different factors that affect your monthly mortgage payment. Let's dive in!

Type of Mortgage Loan

The type of mortgage loan that you have will affect your monthly payments. For example, FHA loans typically have lower interest rates than other types of loans.

FHA loan

A mortgage that is insured by the Federal Housing Administration. These loans allow borrowers to qualify with a lower credit score and a lower down payment.

VA loan

A mortgage that is guaranteed by the Department of Veterans Affairs. Some VA loans offer zero-down-payments options.

USDA loan

A mortgage that is backed by the United States Department of Agriculture. The loans are available to low-to-medium income borrowers in rural areas.

Mortgage Rate

Your mortgage rate is extremely important because of how it affects your monthly payment and the overall amount you end up paying for your home. However, this is also usually one of the biggest variables, as rates fluctuate in relation to the economy and your own finances.

Generally speaking, the lower your interest rate, the lower your monthly payment will be. That's why it's critical to shop mortgage lenders and find one who can help you secure the best mortgage rate possible.

Credit score

Your credit score is a number that represents your creditworthiness. The higher your credit score, the more likely you are to get approved for a loan with a low interest rate.

Debt-to-Income Ratio

Your debt-to-income ratio is the percentage of your monthly income that goes towards paying off debts. The lower your debt-to-income ratio, the more likely you are to get approved for a loan with a low interest rate.

Mortgage Loan Amount

The amount of money that you borrow will also affect your monthly payment. The higher your mortgage loan amount, the higher your monthly payment will be. However, it's important to remember that closing costs and other fees can add to the overall cost of your loan.

Down Payment

Your down payment is the amount of money that you put towards your home upfront. The higher your down payment, the lower your monthly payments will be. This is important to consider when you're deciding what type of loan you will be using to purchase your home. Down payment requirements can range from zero-down to 20% for conventional loans.

Closing Costs

Don't forget to factor in closing costs! Closing costs are the fees associated with getting a mortgage loan. These can include things like appraisal fees, origination fees, and title insurance.

Closing costs can vary depending on the lender, so be sure to ask about them before you choose a loan. While these may not impact your mortgage payment directly, they may be rolled into the total cost of your loan, which can bump up your mortgage payments.

Property taxes and other considerations

There are a few other costs that you should consider when budgeting for your monthly mortgage payment. These include:

Property Tax

Your property tax rate will affect your monthly payment. Property taxes are typically paid as part of your escrow account. Property tax is not necessarily based on purchase price, but on overall property value. The average property tax rate in Texas is 1.80%.

Homeowners Insurance

Your homeowner's insurance premium will also affect your monthly payment. Homeowners insurance is required if you have a mortgage loan. It protects you in the event of a fire, theft, or natural disaster.

Escrow Accounts

An escrow account is an account that is used to pay your property taxes and homeowners insurance premiums. Your lender will hold onto this money and then pay the bills for you when they are due.

Mortgage Insurance (PMI)

If you have a down payment of less than 20%, you will likely have to pay for mortgage insurance. Mortgage insurance is an insurance policy that protects the lender in the event that you default on your loan. The premium for this insurance is typically added to your monthly house payment.

Average monthly mortgage payment in Houston

Now that we've discussed all of the factors that affect your monthly mortgage payment, let's talk about what the average mortgage payment is in Houston.

According to Zillow, the median home value in Houston is $338,000. With a 20% down payment and a 30-year fixed-rate mortgage at 5.9%, your monthly payments would be about $1650 to $2200, depending on tax and insurance.

In fact, the median monthly mortgage payment in Houston, TX is $1,815. This is slightly higher than the Texas state average of $1,675.

Finding the right mortgage lender

Now that you know what the average monthly mortgage payment is in Houston, it's time to start shopping around for a loan. The Texas housing market is hot, and that's why the right lender can make a big difference to help you cut through the noise.

The best way to find a good mortgage lender is to ask your friends and family for recommendations. You can also check out online reviews. Once you've found a few prospective mortgage lenders, be sure to compare interest rates and fees. Choose the lender that offers you the best deal.

Get started

When you're ready to apply for a loan, be sure to have all of your financial documentation in order. This includes things like your tax returns, pay stubs, and bank statements. The more prepared you are, the smoother the process will go.

Now that you know what goes into the average monthly mortgage payment in Houston, you can start budgeting for your new home. Ready to apply for pre-approval today? The team at Texas United Mortgage is ready to help!


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