Everything is bigger in Texas, they say - except, it seems, mortgage rates and home loan delinquencies. During the same time period in which more than one in ten Americans had fallen at least thirty days behind on their mortgages, only 8.8 percent of Texas homeowners faced the same challenge. Fewer than 1.5 percent of Texas mortgage holders were in serious delinquency by missing three or more payments.
While the difference between the state and national averages might not seem like much to the casual observer, it means a great deal to economists and mortgage brokers. Texas made its speedy recovery thanks to the energy, health care and high tech industries, especially in economic centers like Austin, Dallas and Houston. Stability in each of those economic sectors has helped sustain home ownership, especially as overall unemployment levels have declined over the past year.
Mortgage rates in Texas reward smart borrowers
Lenders have rewarded Texas residents with some of the lowest mortgage rates in the nation. A May 2010 scan of online mortgage broker rates showed some 15-year fixed rate home loans at 3.75 percent or less. Thirty-year mortgage rates hovered comparably lower than national averages, often at around 4.50 percent. Texas residents ready to make long term commitments can lock down some of the lowest mortgage rates in the country, with origination fees as low as three-quarters of a point.
However, as in other parts of the country, borrowers with upside-down home loans have found it challenging to take advantage of record low refinancing rates. Texas mortgage lenders have been signing up new home loan customers at pre-recession rates, but as many as one-third of homeowners here may have to wait for further recovery to restore enough home equity to make a refinance deal possible.
Under the cautious new rules of a rebounding real estate market, borrowers still need to bring equity to the closing table for lenders to make good deals. The days of 125-percent jumbo loans are long gone, forcing many prospective homeowners to scrape up cash for closing the old-fashioned way: saving money. Texas' prosperous employers and 401(k) loans have helped some to meet equity requirements. In many cases, though, the short term pressure to gather cash for a down payment can lead to long term savings that will last for a generation.