What can you afford?
How a mortgage payment is built, how lenders decide, and what to budget for — in plain English.
What goes into a payment.
A monthly housing payment is usually principal and interest plus property taxes and homeowners insurance (often collected in escrow), and, if they apply, mortgage insurance, HOA dues, and MUD taxes. In the Houston area, taxes and insurance can add a substantial amount on top of principal and interest.
How lenders look at it.
Lenders review your income and employment, credit history, assets for the down payment and reserves, and your debt-to-income ratio (monthly debts, including the new payment, divided by gross monthly income). Each loan program sets its own limits.
Common loan types.
- Conventional: not government-insured; mortgage insurance usually applies with less than 20% down.
- FHA: insured by the Federal Housing Administration, with lower minimum down payments and its own mortgage insurance.
- VA: for eligible veterans, service members and some surviving spouses.
- USDA: for eligible properties and incomes in designated rural areas.
Rates: where things stand.
Freddie Mac's Primary Mortgage Market Survey reported a U.S. weekly average of 7.24% for a 30-year fixed-rate mortgage and 6.60% for a 15-year fixed, as of October 29, 2026 (Freddie Mac PMMS, accessed October 28, 2026). These are national averages, not a quote or an offer — your rate depends on your credit, down payment, loan type, points and the day you lock.
Example payment.
Hypothetical example only: a $350,000 30-year fixed loan at 7.32% has a principal-and-interest payment of about $2,404 a month. At 6.32%, the same loan would be about $2,171. Taxes, insurance and any HOA, MUD or mortgage insurance come on top. Our free report tool lets you try your own numbers.
Cash to close.
Besides the down payment, plan for closing costs (lender, title and escrow fees, prepaid taxes and insurance), plus earnest money and an option fee at contract and inspection costs during the option period. Your Loan Estimate lists the lender's figures.
Down payment help.
Down payment and closing cost assistance programs exist, including statewide programs through the Texas Department of Housing and Community Affairs and some city and county programs. Eligibility rules vary; ask lenders which programs they work with.
Shopping for a lender.
Get Loan Estimates from more than one lender on the same day and compare the rate, points, and lender fees. The CFPB has a step-by-step guide. MAC does not endorse or require any lender.
General information for Texas home buyers and sellers, not legal, tax or lending advice. Talk with the appropriate professional about your situation.
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