In Texas, what is the maximum loan-to-value ratio for conventional loans without private mortgage insurance?

In Texas, the maximum loan-to-value (LTV) ratio for conventional loans without private mortgage insurance (PMI) is 80%. This means that borrowers can typically finance up to 80% of the property's appraised value or purchase price (whichever is lower) without being required to pay for PMI. LTV is a crucial measure used by lenders to assess the risk of a loan; a lower LTV ratio can indicate a more financially secure investment for the lender.

When a borrower has an LTV above 80%, lenders often require PMI as a safeguard against default, since the borrower will have less equity in the property. It is essential to understand this ratio as it can significantly affect a buyer's financing options, property affordability, and the overall cost of a mortgage.

Additionally, keeping the LTV within this limit can save the borrower money on monthly payments and extra insurance costs, making it a crucial factor in real estate finance for those seeking to avoid PMI.