Buying a home is one of the biggest financial decisions you’ll ever make, and choosing the right mortgage is just as important as picking the perfect house. With so many loan options available, it’s easy to feel overwhelmed. But don’t worry—our TFNB Your Bank for Life mortgage specialists are here to help you navigate the process and find the best mortgage for your needs.

As a trusted local bank in Central Texas, we understand the Waco area housing market and the financial challenges that homebuyers face. Whether you’re a first-time buyer or looking to refinance, this guide will break down your mortgage options so you can make an informed decision.


Understanding Mortgage Basics

Before we dive into different mortgage types, let’s cover the basics. A mortgage is a loan used to purchase a home, with the property itself acting as collateral. You’ll repay the loan over time, typically in monthly installments, which include both principal (the amount borrowed) and interest (the cost of borrowing). The mortgage you choose will impact your monthly payments, loan terms, and overall financial health, so selecting the right one for your budget is important.


Types of Mortgages Available

  • Conventional Loans – Great for Long-Term Homeownership: Conventional loans are not backed by the government and typically require higher credit scores and down payments. They come in two main types:
    • Fixed-rate mortgages: This type of home loan has a fixed interest rate for the entire term of the loan. Typically, fixed-rate mortgage loans have terms of 15 or 30 years but can vary depending on the terms agreed upon by you and the mortgage lender.
      • Best for: Buyers with good credit and stable income who want predictable payments and who plan to stay in their home long-term.
    • Adjustable-rate mortgages (ARMs): A home loan where the initial interest rate is lower and fixed for a set period, but then adjusts periodically based on market conditions, meaning your monthly payment can fluctuate throughout the loan term depending on current interest rates.
      • Best for: Those who plan to sell the home before the loan's fixed-rate phase ends. This option is also ideal when interest rates are expected to decline over time.
  • FHA Loans – A Great Option for First-Time Buyers: Backed by the Federal Housing Administration (FHA), these loans are designed for buyers with lower credit scores or smaller down payments (as low as 3.5%). They have more flexible qualification requirements, making homeownership accessible to more people.
    • Best for: First-time homebuyers or those with lower credit scores.
  • VA Loans – Exclusive Benefits for Veterans: Available to eligible military service members, veterans, and their families, VA loans offer zero down payment and competitive interest rates. Plus, there’s no private mortgage insurance (PMI), which can save you money.
    • Best for: Active-duty military members, veterans, and eligible spouses.
  • USDA Loans – Perfect for Rural Homebuyers: If you’re looking to buy a home in a rural or suburban area, a USDA loan might be a great fit. These loans require no down payment and offer low interest rates, making them an affordable option for buyers in qualifying areas.
    • Best for: Buyers purchasing homes in rural areas who meet income requirements.
  • Jumbo Loans – For High-Priced Homes: A jumbo loan is designed for home purchases that exceed the limits set by conventional loan programs. These loans often have stricter qualification criteria, including higher credit scores and larger down payments.
    • Best for: Buyers purchasing high-value homes.


How to Choose the Right Mortgage for You

Now that you know your options, how do you decide which mortgage is right for you? Here are a few key factors to consider:

Your Credit Score – A higher credit score can help you qualify for better interest rates and loan terms.

Your Down Payment – Some loans require a larger upfront investment, while others allow for little or no down payment. Typically, down payments range from 3% to 20% of a home’s purchase price for a primary residence, depending on the loan type and your qualifications. A higher down payment can lower your monthly payments and may help you avoid private mortgage insurance (PMI).

Your Long-Term Plans – If you plan to stay in your home for decades, a fixed-rate mortgage may be best. If you expect to move in a few years, an ARM might save you money.

Your Debt-to-Income Ratio – Lenders consider how much debt you have compared to your income to determine how much you can borrow.

Your Monthly Budget – Make sure your mortgage payment fits comfortably within your budget so you’re not stretched too thin. While it’s exciting to buy your dream home, you don’t want to end up “house-poor”—struggling to cover other expenses because too much of your income goes toward your mortgage.


Why Choose TFNB Your Bank for Life?

At TFNB Your Bank for Life, we do more than just offer mortgages—we provide financial guidance tailored to your unique needs. As a trusted Waco bank, we believe home financing should be a smooth and stress-free process, which is why we take the time to understand your goals and help you find the right mortgage solution that’s personalized to you.

Here’s why homebuyers in Central Texas choose TFNB:

Personalized Lending Solutions – We understand that every homebuyer’s situation is different. Our team works with you to explore financing options that fit your budget and long-term plans.

Local Expertise – As a local bank in Central Texas, we know the Waco real estate market inside and out. That means we can provide guidance tailored to your homebuying journey.

Flexible, Community-Focused Banking – We’re committed to helping our neighbors achieve their homeownership dreams with lending terms that make sense for their unique circumstances.

A Relationship That Goes Beyond Your Mortgage – At TFNB, you’re more than just a loan number. We’re here for you through every stage of your financial journey, offering the personalized service and trusted advice you won’t get from a big-box lender.


Take the Next Step Toward Homeownership 

Buying a home is an exciting milestone, and choosing the right mortgage is key to making your dream home a reality. If you're asking, "What mortgages are right for me?”—we’re here to help.

Ready to get started? Contact or stop by one of our locations to speak with a mortgage expert and find the best loan option for you.