Conventional Loan Step-by-Step Application Guide for Texas

Conventional Loan

Conventional Loan Step-by-Step Application Guide for Texas

Reviewed by the HomeMath editorial team Updated 2026-08-06

Key takeaways

Minimum credit score: roughly 620 for most conventional loans
Down payment can be as low as 3 % of the purchase price
Typical timeline: about 30‑45 days from application to closing
Texas is a community‑property state, so both spouses often need to be on the loan

Step 1: Get Pre‑Qualified

Contact a lender to provide a quick snapshot of what you might afford based on your income, debt, and credit. This step helps you set realistic price expectations before you start house hunting.

Step 2: Gather Required Documentation

Recent pay stubs (usually last 30 days)
Two years of tax returns
Bank statements showing assets and reserves
Proof of any additional income (bonuses, rental income, etc.)

Lenders need these documents to verify the information you gave during pre‑qualification and to assess risk.

Step 3: Get Pre‑Approved

Submit the documents to the lender for a formal credit pull. The lender will issue a pre‑approval letter, which shows sellers you’re a serious buyer. This letter is typically valid for 60‑90 days.

Step 4: Make an Offer and Sign the Purchase Agreement

Once your offer is accepted, you’ll lock in the purchase price and terms. The agreement often includes a financing contingency that protects you if the loan doesn’t close.

Step 5: Complete the Full Loan Application (1003 Form)

The Uniform Residential Loan Application collects detailed information about the property, employment, assets, and liabilities. Filling it out accurately speeds up underwriting.

Step 6: Underwriting Review

An underwriter checks that you meet the lender’s guidelines, including credit score, debt‑to‑income ratio, and loan‑to‑value ratio. They also verify the documentation you provided.

Step 7: Appraisal and Property Inspection

Appraisal: Determines the market value of the home to ensure it supports the loan amount.
Inspection: Identifies any major defects that could affect safety or value.

The appraisal protects the lender, while the inspection protects you as the buyer.

Step 8: Final Approval and Closing Disclosure

After underwriting signs off, you’ll receive a Closing Disclosure at least three business days before settlement. Review it for any last‑minute changes in fees or loan terms.

Step 9: Closing (Settlement)

In Texas, most closings are handled by a title company rather than an attorney, though some buyers still use an attorney for extra protection. You’ll sign the loan documents, pay any required closing costs, and receive the keys.

Because Texas is a community‑property state, both spouses typically need to sign the mortgage and be listed on the title if the home is owned jointly. This ensures the lender has a claim against the full ownership interest.

Important: This article provides general information and does not constitute personalized financial or legal advice. Consult a qualified lender or attorney for advice tailored to your specific situation.

FAQ

Do I need a Texas attorney at closing?

Most Texas residential closings are conducted by title companies, which handle the deed transfer, title insurance, and settlement statements. An attorney is not required by law, but some buyers choose to retain one for additional legal review, especially in complex transactions.

How does community‑property law affect my conventional loan?

In a community‑property state like Texas, assets and debts acquired during marriage are generally owned jointly. Lenders usually require both spouses to be on the mortgage and title, because the loan is secured by the entire ownership interest. This can affect the debt‑to‑income calculation and the amount of equity each spouse contributes.

Can I apply for a conventional loan without a real‑estate agent?

Yes. A conventional loan is a product of the lender, not the real‑estate market. You can work directly with the seller or a for‑sale‑by‑owner (FSBO) listing, but having an agent can help negotiate terms, manage paperwork, and coordinate inspections.

What happens if the appraisal comes in lower than the purchase price?

If the appraisal value is below the agreed‑upon price, the lender will only finance up to the appraised amount. You’ll need to either negotiate a lower price with the seller, increase your down payment to cover the difference, or walk away if the contract includes an appraisal contingency.

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