Fast, informal
Pre-Qualification
A quick estimate based on self-reported income and debt. It can help you start a search, but it does not carry much weight with sellers.
No hard credit pullUnverified incomeInformal estimateWeak offer tool
Buyer Resources
Financing & Pre-Approval Guide
Loan types, credit readiness, and the details that make a pre-approval letter actually matter in a competitive offer.
~13 min readLoan typesCredit & qualification
Why It Matters
Your financing position shapes how far your offer can go.
Financing affects the homes you can compete for, how sellers read your offer, and how smoothly the transaction closes. Getting clear on the basics before you shop keeps the process calm instead of reactive.
Step One
Pre-Qualification vs. Pre-Approval
These are not interchangeable. One is a rough estimate. The other is a meaningful signal to a seller.
Seller-ready
Pre-Approval
A lender reviews your credit, income, and assets and issues a conditional commitment. It takes longer, but it gives your offer real credibility.
Hard credit pullIncome verifiedConditional commitmentStrong offer signal
Bottom Line
Never write an offer without a pre-approval letter. In competitive markets, pre-qualification alone usually is not enough. The few days it takes to secure a true pre-approval are almost always worth it.
Loan Types
Which loan is right for you?
Texas buyers have access to several common loan programs. The right fit depends on your credit, savings, military status, and the type of property you're buying.
Conventional Loan
Down: 3% - 20%+Credit: 620+
Best For
Strong credit, stable income, and buyers who want flexibility without upfront mortgage insurance surprises.
Key Notes
PMI is required below 20% down. Best pricing usually goes to 740+ credit. Available for investment properties.
FHA Loan
Down: 3.5%Credit: 580+
Best For
First-time buyers with lower credit scores or limited down payment savings.
Key Notes
Mortgage insurance usually lasts for the life of the loan. Loan limits apply by county, and FHA appraisals are stricter.
VA Loan
Down: 0%Credit: 580-620 (lender-specific)
Best For
Active military, veterans, and surviving spouses. One of the strongest loan options available.
Key Notes
No PMI, no required down payment, and competitive rates. Funding fee applies unless waived for eligible disabled veterans.
USDA Loan
Down: 0%Credit: 640+
Best For
Buyers purchasing in eligible rural areas. Many parts of Central Texas qualify.
Key Notes
Income limits apply. The property must be in a USDA-eligible area. Killeen, Waco outskirts, and many rural TX areas often qualify.
Jumbo Loan
Down: 10% - 20%+Credit: 700+
Best For
High-end purchases above conforming loan limits, which continue to shift year to year.
Key Notes
Higher reserves are common. Qualification is stricter, and these loans are often held in portfolio rather than sold to Fannie or Freddie.
Know Your Levers
What actually affects your interest rate
Credit Score
HighThe single biggest lever. Moving from 680 to 740 can materially improve pricing and save thousands over the life of the loan.
Down Payment Size
HighMore cash down can improve your rate. Below 20%, you also pay PMI. At 20% down, mortgage insurance usually drops away.
Loan Type
MediumVA loans often price very well. Conventional loans are competitive for high-credit buyers. FHA rates can be similar but include mortgage insurance.
Loan Term
MediumFifteen-year loans usually carry lower rates than 30-year loans, but the payment is higher. The right choice depends on your cash flow.
Debt-to-Income Ratio
MediumLenders want housing costs and total monthly debt to stay in a healthy range. Lower debt load generally means easier qualification.
Lender Choice
VariesRates vary from lender to lender. Big banks, credit unions, and mortgage brokers all price differently, so shopping a few options can pay off.
Be Prepared
Documents you'll need for pre-approval
Gather these in advance. Having everything ready upfront usually makes the process faster and much less frustrating.
Income
- 2 years of W-2s
- 2 years of federal tax returns
- 30 days of recent pay stubs
- If self-employed: 2 years of business returns plus P&L
Assets
- 2-3 months of bank statements for all accounts
- Investment or retirement statements
- Documentation for any gift funds, including gift letter and transfer proof
Identification & Credit
- Government-issued photo ID
- Social Security number for the credit pull
- If VA: Certificate of Eligibility or DD-214
Need a Lender Recommendation in Central Texas?
I work with buyers across all financing types and can point you toward the right lender for your specific situation — VA, conventional, FHA, and everything in between.