What Financing Options Should You Explore When Buying a Home in Plano?

Buying a home in today’s market isn’t just about finding the right house — it’s also about choosing the right financing strategy. With interest rates, loan programs, and rate buydowns all in play, buyers in Plano are asking smart questions about how to structure their mortgage for both affordability and long-term value.

Here’s a clear breakdown of the most common financing options to consider.

🏦 Conventional Loans

Conventional mortgages are one of the most popular options for Plano buyers.

Best for: Buyers with solid credit and stable income
Typical requirements:

• 5–20% down payment

• Strong credit score

• Private Mortgage Insurance (PMI) if putting less than 20% down

These loans often offer competitive interest rates and flexibility, especially for move-up buyers or those purchasing condos and single-family homes in Plano.

🏡 FHA Loans

FHA loans are backed by the Federal Housing Administration and are popular with first-time buyers.

Best for: Buyers with lower down payments or credit scores
Key benefits:

• Down payments as low as 3.5%

• More flexible credit requirements

However, FHA loans require mortgage insurance and the property must meet FHA guidelines — which is especially important for condo purchases.  FHA loans can also have funding fees applied so ask your lender.

🇺🇸 VA Loans

If you’re a qualifying veteran or active-duty service member, VA loans can be an excellent option.

Benefits include:

• No down payment required

• No private mortgage insurance

• Competitive interest rates

VA loans are subject to property approval, so condo eligibility should be verified early.  Also VA loans can also have a another fee attached so ask your lender

💰 Interest Rates: Fixed vs. Adjustable

Buyers in Plano often ask whether they should choose a fixed-rate or adjustable-rate mortgage (ARM).

• Fixed-rate mortgages offer predictable monthly payments and long-term stability.

• Adjustable-rate mortgages may start with lower rates but can change over time — often better for buyers who plan to move or refinance within a few years.

The right choice depends on your timeline and comfort with future rate changes.

📉 Rate Buydowns (A Growing Trend)

Rate buydowns have become more common in today’s market.

A rate buydown allows the buyer (or seller) to pay upfront to temporarily or permanently reduce the interest rate.

• Temporary buydowns (like 2-1 or 1-0 buydowns) lower payments in the first few years

• Permanent buydowns reduce the rate for the life of the loan

In some cases, sellers may offer a credit toward a buydown to help make monthly payments more affordable — a win-win in a balanced market.

🤝 Why Pre-Approval Matters

No matter which financing route you choose, getting pre-approved early is key. It helps you:

• Understand your true buying power

• Offers are only accepted with a pre-approval for preowned homes.   New construction you will have to get qualified.

• Move quickly in competitive situations

Working with a knowledgeable local lender can also uncover programs specific to the Texas area.

Bottom Line

There’s no one-size-fits-all mortgage. The best financing option depends on your goals, timeline, and financial comfort level. Exploring multiple loan types, understanding interest rate options, and considering rate buydowns can make a significant difference in your monthly payment — and your overall buying experience.

If you’d like help connecting with trusted local lenders or comparing options for your specific situation, I’m happy to guide you.