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Best Mortgage Lenders in Waco, TX

Sept. 26, 2019, 8:59 p.m.

If you want to buy a house in Waco, you need to find a mortgage. Mortgage lenders provide the necessary funding to purchase a home and serve as invaluable partners that guide you through the complicated homebuying process. Our partners at ConsumerAffairs researched the best mortgage lenders in Waco to help find the lowest rates on a loan for your dream home.

Everyone deserves to make thoughtful, informed purchase decisions. The local guides provided on this website are free for consumers. KXXV may receive compensation from our partners. Learn more.

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  • 16 years of industry experience
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#2
HomeDirect
HomeDirect
Features
  • Direct lender
  • Keeps the servicing of the loan
  • Email notifications at every step of the process
  • Available in Waco
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The Wood Group of Fairway
The Wood Group of Fairway
Features
  • Named top 10 mortgage company in U.S. by Mortgage Executive Magazine
  • #1 in McLennan County FHA & VA loan volume
  • 24/7 access to mortgage loan information
  • Top 1% of mortgage originators by Mortgage Executive Magazine
Location
100 Santa Fe Dr., Ste. 3
Waco, TX 76712
(254) 340-2462
Wallick & Volk Waco
Wallick & Volk Waco
Features
  • Family owned and operated mortgage lending since 1932
  • Renovation, refinance & reverse mortgage
  • Equal housing lender
  • Best of Waco Mortgage Lender for 5 years by Waco's Magazine
Location
919 N. Valley Mills Dr., Ste. D
Waco, TX 76710
(254) 772-5430
American Bank
American Bank
Features
  • M-Th: 9am - 4pm
  • F: 9am - 5pm
  • Closed Sat and Sun
  • ambankwaco.com
Location
1601 N. I-35 Frontage Rd.
Waco, TX 76705
(254) 412-2000
The Koehn Mortgage Group - Waco
The Koehn Mortgage Group - Waco
Features
  • M-F: 8:30am - 5:30pm
  • Closed Sat and Sun
  • kmortgagegroup.com
Location
1600 Lake Air Dr.
Waco, TX 76710
(254) 405-6690
PrimeLending
PrimeLending
Features
  • M-F: 8:30am - 5pm
  • Closed Sat and Sun
  • lo.primelending.com/waco
Location
4700 Bosque Blvd., Ste. K
Waco, TX 76710
(254) 230-9468
The McCulloch Mortgage Team
The McCulloch Mortgage Team
Features
  • M-F: 9am - 5pm
  • Closed Sat and Sun
  • mccullochteam.com
Location
4800 Lake Arrowhead Dr.
Waco, TX 76710
(254) 744-4627
Extraco Banks
Extraco Banks
Features
  • M-Th: 9am - 4pm
  • F: 9am - 5pm
  • Closed Sat and Sun
  • extracobanks.com/home-loans
Location
1700 N. Valley Mills Dr.
Waco, TX 76710
(254) 761-2000
loanDepot Waco
loanDepot Waco
Features
  • M-F: 9am - 5pm
  • Closed Sat and Sun
  • loandepot.com/branches/waco-tx
Location
600 Lake Air Dr., Ste.1a
Waco, TX 76710
(254) 722-4940

How to choose a mortgage lender in Waco

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Because of Waco’s low cost of living, the city has been consistently growing in popularity for those looking to purchase a home. There are many homes on the market, and with an average home price of $107,700 — significantly lower than the $151,500 Texas average — Waco is a cheaper alternative to many other cities nearby.

Because of its proximity to big cities, Waco is also a great city for families who want to live in a smaller community with access to major hubs. Here’s a breakdown of the median value of an owner-occupied home near Waco:

Home values in Waco and surrounding areas

City Median home value Distance from Waco
Waco $107,700 -
Arlington $147,000 81.9
Fort Worth $141,400 83.9
Dallas $154,000 86.9
Austin $285,900 96.1

The U.S. Department of Housing and Urban Development (HUD) reports that economic growth in Waco led to an 8 percent increase in houses sold between 2015 and 2016.

Types of mortgages available in Waco

There are many types of mortgages available in Waco, but all have either fixed or variable rates

  • A fixed-rate mortgage sets your interest rate at a consistent number throughout the entire repayment term, which makes it easier to budget month to month and protects you when interest rates rise. More than 75 percent of homebuyers have a fixed-rate mortgage.
  • An adjustable-rate mortgage typically changes rates every year after an initial fixed-rate period. This option may be cheaper at first and allows you to take advantage when rates drop, but your payments will fluctuate and be more difficult to budget. You also pay more when interest rates rise.

Once you decide which of these two options you prefer, you must choose if you want a government-issued loan or a conventional loan. Conventional loans are more common in Waco but often require a higher credit score.

While there’s a standard belief you need a 20 percent down payment to be approved for a conventional mortgage, many lenders offer loans with a down payment as little as 3 percent. Loans with lower down payments often come with higher interest rates, however, and you may be required to purchase mortgage insurance.

If the value of the house you’re purchasing exceeds the conforming loan limit set annually by the Federal Housing Finance agency, then you’ll require a jumbo mortgage. These loans are for high-value homes and are not eligible to be purchased or guaranteed by Fannie Mae or Freddie Mac. Qualifying for a jumbo mortgage usually requires excellent credit because of the loan value.

Different branches of the U.S. government also issue mortgages. Some of the options include:

  • VA loans are backed by the U.S. Department of Veterans Affairs. These mortgages have low rates and require no down payment, but are only offered to active military service members, veterans and surviving spouses.
  • FHA loans, which are backed by the Federal Housing Administration, accept homebuyers with credit scores as low as 500. These low-interest loans require down payments of 10 percent or less, depending on your credit score. Borrowers must purchase mortgage insurance, however, which increases your total cost.
  • USDA loans are backed by the U.S. Department of Agriculture and are available for homes in specified rural areas. These low-interest loans do not require a down payment.

Texas has a variety of statewide homebuying assistance programs as well.

Your last step is to choose how long you want to pay for your mortgage. The most common in Waco is a 30-year mortgage. Choosing a shorter term, such as 10 or 15 years, reduces the total cost of your mortgage but increases your monthly payments.

When to get a mortgage lender in Waco

While you can wait until you have an accepted offer on a home, it’s a good idea to find a mortgage lender at the beginning of your homebuying process. A mortgage lender can write a pre-approval letter stating how large of a loan you’re approved for, which is used when making an offer on a home. This letter gives you an idea of what additional costs you should expect and helps you budget during the buying process.

Here’s what you need to get pre-approved in Waco:

  • Financial information (bank, savings, checking, investments)
  • Debt obligations (credit cards, student loans, etc.)
  • Two years of tax returns
  • Salary and employer information
  • Amount you plan to put down for a home

A mortgage lender looks over these documents, gets a hard check on your credit score and decides how much you are approved for and at what terms. It’s possible to receive a mortgage rate online, but these are not official preapprovals; you still have to submit an application and get a credit check to receive an accurate rate quote.

Like most loans, you should get mortgage rates from a variety of lenders to compare. Working with a reputable lender is often better than having the lowest rate, but that depends on your needs and budget. Having a low interest rate can help save thousands of dollars in the long run, but having a trustworthy mortgage lender provides reliability and prevents future problems.

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AmeriSave’s online mortgage quote generator takes less than one minute and requires no personal information. Once you get your quote, you can compare your options and find what works best for you with no hidden fees, obligations or commitments. Waco customers appreciate the quick and convenient application process.

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HomeDirect

HomeDirect

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(888) 266-2249 VISIT HOMEDIRECT

HomeDirect has an efficient online application process and a minimum credit score requirement of 580, which is one of the lowest in the industry. HomeDirect also has great options for veterans. Waco homebuyers appreciate that the lender services loans as well, letting customers stay with the company through the life of the loan.

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Our partners independently research and analyze the companies mentioned in our guides and work with subject matter experts to add valuable information that helps consumers make smart purchase decisions. Our partners will not include companies on these guides that do not meet specific quality standards. The compensation we receive from our partners may impact how and where companies appear on our site, including the order in which they appear.

Our partners independently research companies, and use editorial discretion to award companies with special recognition (i.e. Best Value) based on their staff’s judgement or subject matter expert’s judgement. Our partners do this to help you identify companies that will meet your specific buying needs, and do not receive compensation for these designations.