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Comparing a Texas Vet Loan and VA Loan

Two Programs with Great Benefits for Veterans Living in Texas

When you’re considering buying a home, knowing all your financing options is crucial. It’s important to compare Texas Vet loans and regular VA loans to see which offers you the best benefits and savings.  

Getting a detailed loan comparison quote, highlighting differences in rates and closing costs, is essential for making an informed decision. Shirley, an expert in Texas home financing for veterans, provides this valuable service, ensuring you choose the loan that best fits your needs and offers the greatest financial advantage. 

Below list the key differences between a Texas Vet Loan and VA Loan

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Texas Vet Loan and VA Loan Overview

This chart gives a clear comparison of the key differences between Texas Vet and Federal VA home loans, helping veterans understand their options based on residency, fees, interest rates, and other loan specifics.

Comparison Point 

Texas Vet Loan 

Federal VA Home Loan 

Eligibility 

Must be a Texas resident at time of mortgage application 

No residency requirement 

Lender Fees Allowed 

1% origination fee, 1% participation fee 

Underwriting fees 

Origination Fees, Lender Fees, Discount Points 

Interest Rate 

Changes weekly; 30%+ VA disability can affect rates 

Changes daily; VA disability has no effect 

Loan Amount 

Max $766,550 

No maximum limit 

Occupancy 

Must intend to occupy for 3 years 

Must intend to occupy 12 months 

Loan Type 

Purchase only 

Purchase and refinance allowed 

Maximum Loans 

One at a time 

Multiple loans allowed 

Private Mortgage Insurance (PMI) 

This is not charged on a VA Texas Vet Loan however is charged on an FHA Texas Vet and Conventional Texas Vet Loan with less than 20% down 

 

There is no PMI 

Energy Requirements 

Must have ENERGY STAR or HERS Index ≤ 75 for new home construction 

No specific requirements 

Texas Vet Rate vs. VA Loan Rate 

The Texas Vet Loan program and Federal VA loans offer distinct advantages for veterans, with specific differences in how interest rates are determined and adjusted, as well as the impact of factors such as disability ratings and credit scores. Understanding these differences is crucial for veterans as they navigate their home financing options. 

Interest Rate Adjustments 

  • Texas Vet Loan Rates: The interest rates for Texas Vet Loans are adjusted weekly, with the new rates taking effect every Monday. This means that the rate you’re offered at the beginning of the week is the rate that will apply throughout that week, providing some stability in your rate shopping process. 
  • Federal VA Loan Rates: In contrast, Federal VA loan rates can adjust daily based on market conditions. This fluctuation means that the rate can vary from one day to the next, which might affect your loan pricing over time. 
Rate Lock Terms 
  • Texas Vet Loans typically offer shorter rate lock periods. This means you have a limited window to lock in your interest rate once you’ve initiated the loan process. 
  • Federal VA Loans generally provide longer rate lock periods, offering more flexibility and potentially allowing you to secure a more favorable rate if market conditions change. 
Impact of Disability Ratings 
  • Texas Vet Loans offer a discounted rate for veterans who have a service-connected disability rating of 30% or more. This discount is significant, reducing the interest rate by 0.5% from the starting rate, which can translate to considerable savings over the life of the loan. 
  • Federal VA Loans do not adjust loan rates based on disability ratings. The interest rate offered is not directly impacted by a veteran’s disability status. 
Influence of Credit Scores 
  • Texas Vet Loan Rates are unique in that they are not directly affected by the borrower’s credit score. This can make it easier for veterans with varying credit histories to access competitive rates. 
  • Federal VA Loan Rates can be influenced by your credit score, with higher scores potentially securing lower interest rates. This reflects the lender’s assessment of risk associated with the loan. 
Buying Down Rates 
  • Texas Vet Loans do not allow veterans to buy down their interest rate below the available rate for the week. This policy maintains the program’s fairness and simplicity. 
  • Federal VA Loans offer the flexibility for borrowers to pay discount points upfront in exchange for a lower interest rate. This can be an effective strategy for veterans planning to stay in their home for a long time and looking to minimize long-term interest costs. 

Texas Veterans and VA Loan Rate

Features

Feature 

Texas Vet Loan 

Federal VA Loan 

Rate Adjustment 

Weekly on Monday 

Daily 

Rate Lock Term 

Shorter term 

Longer term 

Disability Rate Impact 

0.5% rate discount for 30%+ disability 

No impact 

Credit Score Impact 

Not affected by credit score 

Rates can be lower with higher credit scores 

Buying Down Rate 

Not allowed to buy down below the weekly rate 

Allowed to buy down the rate 

This comparison illustrates the key differences between Texas Vet and Federal VA loans, highlighting the unique benefits each offers to veterans. Understanding these distinctions can help veterans choose the loan option that best fits their financial situation and homeownership goals. 

Texas Veterans and VA Loan Closing Cost

When comparing Texas Vet closing costs to VA closing costs, it’s important to understand that both loan programs are designed to help veterans purchase homes, but they come with different fees and expenses that can impact the overall cost of closing the loan. Here’s a simplified comparison: 

Texas Vet Loan Closing Costs: 

  • May include a 1% origination fee. 
  • Potentially includes a 1% participation fee. 
  • Underwriting fees may apply. 
  • Discount points are not allowed. 
  • Closing costs can include appraisal fees, title insurance, survey, and state recording fees. 
  • Texas Vet Loans may also include specific requirements for energy efficiency that could impact costs, depending on the property. 

VA Loan Closing Costs: 

  • Typically do not include an origination fee if the lender charges the VA’s 1% flat fee. 
  • Typically includes lender fees such as processing and underwriting fees. 
  • Discount points are negotiable, and veterans can pay for points to reduce their interest rate. 
  • VA funding fee varies based on down payment and whether the borrower has used a VA loan before (exempt for disabled veterans). 
  • Other closing costs may include appraisal and compliance inspections, recording fees, credit report and flood determination fee, survey, title insurance, and VA funding fee. 

Both loan types are subject to additional costs such as property taxes, homeowner’s insurance, and prepaid interest. It’s also worth noting that the actual closing costs can vary based on the lender, the property location, and the specifics of the loan. Always consult with a loan officer for the most accurate and up-to-date information regarding closing costs for Texas Vet and VA loans. 

Texas Veterans and VA Loan Closing Costs

Texas Veterans and VA Loan Closing Costs  

Lender Charges 

Texas Vet Loan 

Federal VA Loan 

Origination Fee 

Up to 1% of the loan amount 

Up to 1% of the loan amount 

Participation Fee 

Up to 1% of the loan amount 

N/A 

Discount Points 

N/A  

Unable to buy down a Texas Vet Rate 

Negotiable 

Used to reduce interest rate 

VA Funding Fee 

  

2.15% – 3.3% of the loan amount, can be financed; zero if the Veteran receives 10% or more disability.  

2.15% – 3.3% of the loan amount, can be financed; zero if the Veteran receives 10% or more disability 

All Other Fees including but not limited to Appraisal, Title, Credit Report, Inspections 

Are not impacted by loan type. 

  

Are not impacted by loan type. 

  

Note: This table provides a general comparison of potential lender charges for Texas Vet Loans and Federal VA Loans, offering Texas veterans a clearer understanding of what to expect. It’s important to remember that actual charges can vary based on the specifics of the loan, the borrower’s circumstances, and changes in regulations. Veterans considering a VA loan in Texas are encouraged to consult with an experienced lender, like Shirley, who can provide personalized advice tailored to their unique situation, ensuring a comprehensive understanding of all associated costs. 

VA Loan Rates

Interest
as Low As
1 %
APR**
as Low As
1 %

Down payment: 0% & Term: 15 & 30 Yr Fixed 
Click HERE for important disclosures

Texas Vet Rates

Interest
as Low As
1 %
APR**
as Low As
1 %

Down payment: 0% & Term: 15, 20, 25 & 30 Yr Fixed 
Click HERE for important disclosures

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CrossCountry Mortgage, LLC is not affiliated with or acting on behalf of or at the direction of the Veteran Affairs Office or any government agency. Certificate of Eligibility required for VA loans. NMLS License #3029 | MB.803095 | NMLS Consumer Access | CFPB

Shirley Mueller

Sr. VP of Veteran Lending Specializing in Texas Vet & VA Loans NMLS ID: 336103

6601 Vaught Ranch Rd, Suite 101 I, Austin, TX 78730

888-788-4977

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**The advertised rates and points listed are subject to change at any time without prior notice and may not be available to all borrowers. These rates are predicated on specific assumptions and lending scenarios. The actual rate available to you can vary depending on your personal details, such as your credit score, the amount of the loan, your down payment, and our internal lending criteria. The rates provided are for a fixed rate mortgage, but they will differ depending on the loan term and property location. Additional rates, points, and loan terms might be available. Approval of all loans is contingent on credit and property evaluations. Property insurance is mandatory, and flood insurance might also be necessary.

Interest rates for the Texas Vet program are set weekly by the Texas Veterans Land Board and are subject to change based on when you lock your interest rate. Annual Percentage Rate (APR) represents the true yearly cost of your loan, including any fees or costs in addition to the actual interest you pay to the lender. Click HERE for an example.

Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact  CrossCountry Mortgage for current rates and for more information.

Copyright ©2024 Shirley Mueller Team Crosscountry Mortgage.