El Paso Mortgage Rates

Living in El Paso, TX

Whether you’re interested in El Paso’s 400-year history, its bustling downtown nightlife or its many state parks, there’s something for everyone in this dynamic corner of Texas. The city of El Paso boasted more than 682,000 residents as of July 2018, according to U.S. Census Bureau estimates, making it one of the largest metropolitan areas in the state of Texas. Homebuyers who move to El Paso have the opportunity to purchase a city center home or a rural dwelling, and for a lower price point than many large urban centers in the U.S.

According to the Texas Board of Realtors, the median home price in the El Paso area was $155,000 in the first quarter of 2019, which represents a 4.8% increase from the previous year. That’s higher than the statewide average of 2.7%.

Additionally, active listings in El Paso were down 21.9% in the first quarter of the year, and housing inventory shrunk to 3.5 months during that time, compared to 4.9 months the previous year. The number of days most homes stay on the market also fell seven days from the first quarter of 2018 to an average of 127 days (this includes the approximately 30-day closing window).

All of these factors indicate a seller’s market in El Paso — one where prices are rising along with demand. Fortunately, housing prices in El Paso are still significantly lower on average than the state median of $230,000, meaning El Paso is still a great city to consider if you’re looking for an affordable place to settle down.

The rules and costs of buying a home in El Paso

Every state and metropolitan area has its own rules for homebuyers and sellers, and El Paso is no exception. Consider these buyer and seller laws as you search for the perfect home in El Paso.

What must sellers disclose? Texas law requires sellers to disclose known defects in any home they market for sale. Sellers are required to use an official seller’s disclosure notice, which asks about material defects and malfunctions, water penetration, easements, structural issues and an array of other information that could affect the quality and resale value of the property. Both the buyer and seller are required to sign the property disclosure form to prove all known defects have been reported and the information has been considered by both parties.

How does foreclosure work? When you fail to keep up with your housing payments or keep your mortgage up to date, your lender may choose to foreclose on your home — or repossess it on the basis of nonpayment. In the state of Texas, foreclosures may be judicial or non-judicial, although most are non-judicial. Whereas judicial foreclosures are handled by the courts and executed following a lawsuit, non-judicial foreclosures don’t have to go through court. Either way, foreclosure sales are required to be filed with the El Paso County Clerk and posted at least 21 days before the proposed foreclosure is set to take place.

How is property divided in divorce? Texas is one of nine community property states. This means that property gained by a married couple is equally owned by both spouses, no matter how the items or property were acquired during the union, and thus will be divided equally in the event of divorce. This includes real estate purchased during a marriage, and Texas state code makes it clear that “property possessed by either spouse during or on dissolution of marriage is presumed to be community property.” There are some exceptions, however. For example, Texas law allows individuals to record and keep separate some property they own in the county where the property is located.

Does a lawyer need to be present during a home closing? Some states require a lawyer to be present during any home closing. However, Texas is an escrow state, meaning a title or escrow agent can assist with the closing and help both the buyer and seller complete the transaction. The escrow or title agent gathers all official closing documents, examines them for accuracy and ensures the sale goes through without a hitch.

Taxes

Texas does not impose any real estate transfer taxes, which can be a significant savings for homebuyers. For some context, other states that don’t have any real estate transfer taxes include Alaska, Idaho, Indiana, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, Oregon, Utah and Wyoming.

While the amount will vary depending on the value of your home, median property taxes in El Paso County in 2019 were $2,126 on a house worth $101,800. That’s a rate of 2.09%, which is one of the highest in the country, according to Tax-Rates.org. The statewide median tax rate is 1.81%, or $2,275 on a home valued at $125,800.

There are a handful of property tax exemptions available to homeowners in the El Paso, Texas, area. The first one is a homestead exemption, the amount of which varies by school district in El Paso. Additional exemptions may be available to homeowners over the age of 65 and surviving spouses of first responders killed in the line of duty. Disabled veterans or their surviving spouses may also qualify for exemptions that can vary in amount depending on the level of disability noted. Finally, persons with certain disabilities may also qualify if they receive federal benefits under the Old Age Survivors and Disability Insurance program.

For more details on El Paso’s property tax exemptions, go here.

Conforming loan limits

In 2019, the conforming loan limit across El Paso County is $484,350, up from $453,100 in 2018. This is the conforming loan limit in most parts of the U.S.

Conforming loan limits are lending standards that dictate how much you can borrow for your loan in order to be sold to government-sponsored entities Fannie Mae and Freddie Mac. Loans that exceed these limits are known as jumbo loans, which tend to carry higher interest rates.

Programs for homebuyers in El Paso, Texas

There are many programs that can help buyers in El Paso and greater Texas purchase a home, although the benefits and requirements vary. Here are some of the programs that can help El Paso residents qualify for a mortgage and save money along the way.

El Paso First-Time Homebuyer Program

This program provides mortgages with deferred 0% interest to those who qualify and purchase a home in El Paso, Texas. Homeowners can choose a property to purchase and the city of El Paso will underwrite the loan along with a participating mortgage lender.

This program can also be paired with a principal reduction add-on in amounts between $1,000 and $35,000 if applicants invest at least $1,000 of their own funds. Down payment and closing cost assistance may also be available in amounts up to $5,000, although this assistance comes in the form of a 3% interest, forgivable loan that lasts 10 years.

Who qualifies:

  • Borrowers must complete a homebuyer education course
  • Borrowers must be first-time homebuyers
  • Income must fall between 60% and 80% of El Paso’s median income based on family size
  • Purchase price must be $121,000 or less
  • Property must be in El Paso and must be a single-family property, 2-4 unit property, a condo or a manufactured home that is permanently attached to a foundation

Single-family housing rehabilitation

The city of El Paso offers a single-family housing rehabilitation program, which provides zero-interest loans up to $65,000 to families who need help repairing or maintaining their homes. These loans can be repaid on a 30-year timeline.

If you’re aged 62 or older and use this program, you can qualify for a 15-year loan with deferred payments, meaning 1/15 of the loan is forgiven every year. You can also qualify for up to $20,000 in accessibility assistance, up to $20,000 for lead, asbestos or mold abatement, and up to $10,000 extra if you’re preserving a historic home.

Who qualifies:

  • Single-family housing rehabilitation requires you to have lived in your home for at least three years
  • You must live within El Paso city limits
  • Home must be valued at less than $133,221 after repairs
  • You must meet income guidelines that vary between $29,350 and $55,350, depending on household size

Home Sweet Texas

The Texas State Affordable Housing Corporation offers the Home Sweet Texas home loan program, which comes with a 30-year, fixed-rate mortgage loan and down payment assistance worth up to 6% of the loan amount. The down payment assistance may be offered as a grant, but it may also be offered as a repayable second mortgage. This program is available statewide, but you do have to work with a participating lender.

Who qualifies:

  • Texas homebuyers with low and moderate incomes may qualify
  • Borrowers do not have to be first-time homebuyers
  • Household income in El Paso County must be at or below $81,880 per year
  • Borrowers must have a FICO score of 620 or higher

Rate shopping tips

Applying for your first mortgage may seem scary, but it doesn’t have to be. These tips can help you sail through the research phase, find the best lender for your needs and get the best rate on your loan.

Contact at least three lenders on the same day

Make sure to contact at least three different lenders on the same day to get a no-obligation mortgage quote. This way, you can make a true apples-to-apples loan comparison that considers interest rates, fees and other terms. To make your job easier, you can also apply for a free quote with LendingTree, which allows you to receive and compare multiple loan offers in one place, based on your creditworthiness.

Give each lender the same information

Also make sure you’re giving each mortgage lender the exact same information, particularly when it comes to your income and credit score. If you don’t know your credit score, you can check it for free by going here. Unless you give each lender the same details, you won’t be able to make an accurate comparison.

Add up all the lender fees to confirm the costs

Beyond comparing interest rates, also make sure you add up all potential lender fees involved in any mortgage loans you’re considering. These can include, but are not limited to, origination charges, appraisal costs and credit report fees.

Know when to lock in the rate

Whether you plan to apply for a fixed-rate loan or an adjustable-rate mortgage, you need to know when to lock in your rate. The act of locking your rate can protect you from rising interest rates as you search for a home or move through the home closing process. Ask your lender about a “float-down” option to protect you if rates fall.

The information in this article is accurate as of the date of publishing.