Texas Trust Home Loans Lender Review: Fast Closing Timeline, but Consumer Complaints May Be a Red Flag

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Texas Trust Home Loans Lender Review 2021
Texas Trust Home Loans Lender Review 2021
Editor’s Score: (2.5/5)
Texas Trust Home Loans Lender Review 2021
Editor’s Score: (2.5/5)
  • Minimum Credit Score:
    640 to 680 for conventional
  • Minimum Down Payment:
    3% to 5%
  • Can Apply Online:
    Yes
  • Operates In:
    6 States

NextAdvisor’s Take

Pros
  • Get a rate quote and estimate your closing costs online
  • Get a rate quote and estimate your closing costs online
  • Closes purchase and refinance loans within 26 or 27 days
Cons
  • Mortgages not available in the other 44 states
  • Only offers conventional loans up to the conforming limit
  • Loan costs may increase if you want to change your loan terms after locking a rate
  • Higher credit score requirements
  • High frequency of complaints per loan volume
The Bottom Line

Texas Trust Home Loans may be a good option if you’re buying a home or refinancing a mortgage with a conventional loan within the lender’s footprint. You can get a quick rate quote online and save money on lender costs, since Texas Trust doesn’t charge origination fees. Its all-digital process can be convenient, and you may be able to close on the loan quickly. However, this isn’t the lender for you if you’re not buying a home in the six states where Texas Trust operates or if you need anything other than a conventional loan. Most notably, it’s difficult to ignore the complaint history. It might be worth checking with multiple lenders for a comparable offer with more reliable customer satisfaction before settling down with this lender.

EDITORIAL INDEPENDENCE

As with all of our mortgage lender reviews, our analysis is not influenced by any partnerships or advertising relationships. For more information about our scoring methodology, click here.

Texas Trust Home Loans Full Review

Texas Trust Home Loans is an online regional mortgage lender that’s affiliated with American Heritage Capital (AHC Lending). The lender operates in six states and only offers conventional loans up to conforming limits. So, you won’t be able to get a jumbo loan, government-sponsored home loan, or specialty products such as a construction loan. Also, credit requirements are higher compared to some of its competitors.

Texas Trust Home Loans claims it has no origination or underwriting fee included in its closing costs and can close loans within 26 or 27 days. Borrowers may be eligible for a free rate-drop if rates decrease after you lock-in. 

Other than its limited menu and lending footprint, the biggest drawback is the company’s frequency of complaints, which is much higher than most other lenders we’ve reviewed. But if Texas Trust has what you need, you might save money on lender fees and close quickly on the loan. Here’s what to know before applying with the lender. 

Texas Trust Home Loans: Mortgage Loan Types and Products

Texas Trust Home Loans’ menu is very limited at the moment. Here’s what you’ll find with the lender right now:

Borrowers have a choice between a fixed-rate mortgage, in which the rate never changes, and an adjustable-rate mortgage. With an ARM, the rate is fixed for a certain amount of time, then may go up or down periodically based on market conditions. Texas Trust offers ARMs with terms of 5/1, 7/1, or 10/1. On a 5/1 ARM, for instance, the rate is fixed for the first five years, then adjusts once a year for the rest of the loan term. 

The lender only offers conventional loans up to a certain dollar amount called the conforming loan limit. That limit is set by the Federal Housing Finance Agency and may change each year. In 2021, the conforming loan limit is $548,250 — though it can be higher in certain high-cost areas.

Borrowers looking to take out a jumbo loan — a mortgage above the conforming loan limit — are out of luck. The lender also doesn’t offer mortgages backed by the Federal Housing Administration (FHA loans), U.S. Department of Agriculture (USDA loans) or the Department of Veterans Affairs (VA loans). Additionally, Texas Trust doesn’t offer specialty products such as renovation loans, reverse mortgages, or construction loans.

Texas Trust Home Loans Mortgage Transparency

When you visit the Texas Trust Home Loans website, you can get a customized rate quote instantly without a hard credit pull. (You’ll need to get a Loan Estimate later to confirm these costs.) This is important because a rate quote can help you determine whether you want to move forward with the lender — without affecting your credit. You can also fill out a request to chat with someone if you need help. 

Notably, you can also estimate the cash due at closing — including your down payment, closing costs, and escrow and prepaid costs — using the rate quote widget. The website also includes a mortgage education section with several blog posts on the homebuying process. 

The website is missing some critical information, such as which types of loans are offered and how borrowers can qualify for a loan with the lender. But loan officers are readily available to answer any of your questions and provide a preapproval or a Loan Estimate, depending on where you are in the homebuying process.

It’s important to point out the company’s complaint history. According to the Consumer Financial Protection Bureau complaint database, Texas Trust’s parent company, AHC  Lending, had 1,593 complaints filed in 2020, and almost half of those complaints were cited as “trouble during payment process.” Texas Trust’s complaint per 1,000 loans (by volume) is significantly higher compared to other lenders we’ve reviewed.  

Texas Trust Home Loans: Mortgage Rates and Fees 

Texas Trust Home Loans advertises daily purchase and refinance rates for 30-year loans, 25-year loans, 20-year loans, 15-year loans, 10-year loans, and three adjustable-rate options. The lender also shows how much you can pay toward discount points, which is a fee you can pay to lower your interest rate. 

The default advertised rates are based on an applicant who is buying a single-family home as a primary residence and has a 23% down payment and excellent credit. So everyone won’t be able to qualify for the lowest advertised rates. But you can customize the rate quote using a different down payment, credit score range, loan amount, and loan terms. 

The rate quote widget also shows you some of the closing costs you’ll pay, but they may vary based on your borrower profile and intended ZIP code. For instance, here are some of the fees the lender lists for a sample home purchase in north Texas:

  • Optional discount points
  • Upfront appraisal fee of $450 to $1,200
  • Credit report fees
  • Flood certificate fee
  • Tax certificate fee 
  • Attorney review fee
  • Costs associated with the title
  • Government recording fees
  • Deed recording
  • Mortgage recording
  • Government taxes

Texas Trust doesn’t charge prepayment penalties on any of its loans, so you can pay off your mortgage early without incurring extra fees. 

The minimum credit score required by Texas Trust varies depending on how much you can put down. With a down payment up to 10%, you’ll need a credit score of at least 680. If you can put down more, such as 15% or 20%, the credit score requirement drops to 660 or 640. That’s still on the higher end compared to some other lenders, which only ask for a credit score of 620 for a conventional loan. 

You can lock in your interest rate for 30 or 45 days for free, but your rate may increase by 0.125% if you decide to make any changes to your loan terms after you’ve locked. But you might be eligible for the free float-down option, where the lender may lower your rate if its published rates drop after you lock.

Another plus: Texas Trust says it closes purchase and refinance loans within 26 to 27 days, which is much faster than the current industry average of 48 days. 

Refinancing With Texas Trust Home Loans

Texas Trust Home Loans’ website offers little information about the refinance process, but you can check some of the closing costs and fees you might pay using the rate quote widget. Here are the two refinance options you’ll have with Texas Trust:

  • Cash-out refinance, which allows you to take out a home loan for more than your existing mortgage. You can keep the extra cash and use it for any expense. Then, you’ll repay the larger home loan over time. This will result in higher monthly payments and  a longer payoff timeline.
  • Rate-and-term refinance, where you swap out your mortgage with a new home loan. Homeowners may do this to save money on interest, switch to a fixed-rate loan, change the loan term, or get rid of private mortgage insurance.

Texas Trust Home Loans Compared to Other Mortgage Lenders

Texas Trust Home LoansFairway Independent Mortgage Corp.Sebonic Financial
Minimum credit score640 to 680 for conventional 620 for conventional; 660 for jumbo; 600 for FHA; 600 for VA620 for conventional; 550 for FHA
Minimum down payment3% to 5%0% to 5%5% for conventional; 3.5% for FHA; 0% for VA and USDA
Where does the lender operate?6 states (Colorado, Florida, New Jersey, Texas, Virginia, and Washington)All 50 states and Washington, D.C.All 50 states and Washington, D.C.
Major loan typesConventional, adjustable-rate, fixed-rate, refinance, cash-out refinanceConventional, jumbo, VA, FHA, USDA, various renovation loans, adjustable-rate, fixed-rate, refinance, cash-out refinance, reverse mortgages, home equity loans, home equity lines of creditConventional, jumbo, VA, FHA, USDA, adjustable-rate, fixed-rate, refinance, cash-out refinance

How to Shop Around to Get the Best Mortgage Rate

Before you start shopping for a home, it’s a good idea to ask a lender for a mortgage preapproval. They’ll check your credit, income, debts, and assets, then put the amount you can borrow in a letter. Use this document when setting your budget and shopping for homes (some sellers require a preapproval to attend an open house or submit an offer). 

You’re not locked in with that lender, though. So when you’re ready to officially apply for a mortgage, gather rate quotes from multiple mortgage lenders. Then, compare the interest rate and closing costs, and use an online mortgage calculator to help you figure out how much you’d spend on interest with each option. According to research from the Consumer Financial Protection Bureau, interest rates can vary by 0.5% or more for similarly qualified borrowers. The agency found that getting multiple quotes could save mortgage borrowers as much as $300 a year.

You may save even more, depending on what you qualify for. Take a look at one example: Let’s say you receive two mortgage rate quotes on a home worth $400,000 with a 20% down payment and 30-year term.

Interest rate Monthly principal and interest paymentTotal interest paid over 30 yearsInterest saved
3.75%$1,852$266,985
3.25%$1,740$226,869$112 a month or $40,116 over the loan term

With a 3.75% interest rate, the monthly principal and interest payment comes out to $1,852. But with a 3.25% interest rate, you save $112 a month on interest costs — or $40,116 over 30 years. 

EDITORIAL INDEPENDENCE

As with all of our mortgage lender reviews, our analysis is not influenced by any partnerships or advertising relationships. For more information about our scoring methodology, click here.