So you want to buy a home in Texas. Maybe you have been renting for years and you are ready to build some equity. Or maybe you just moved here and heard the Lone Star State is more affordable than California or New York.

But when you sit down and look at the numbers, things get confusing fast. What actually makes up that monthly payment? And why does it seem higher than you expected?

Let us break down the affordability math together. Once you understand what drives your monthly payment, you can make smarter choices about the home you buy and where you buy it.

The Four Parts of Your Monthly Payment

Your monthly home payment is not just one thing. It is actually four things bundled together. Lenders call this PITI, which stands for:

• Principal (the actual loan amount you are paying down)
• Interest (what the bank charges you for borrowing money)
• Taxes (your property taxes, paid monthly through escrow)
• Insurance (homeowners insurance and sometimes PMI)

Each piece matters. And each piece can change based on your choices. Let us look at them one by one.

Principal and Interest: The Foundation

The biggest chunk of your payment goes toward principal and interest. This is the core of your mortgage.

Your principal is the amount you borrowed. If you buy a $200,000 home and put $20,000 down, your principal is $180,000. Every month, a portion of your payment chips away at this number.

Interest is the cost of borrowing that money. Right now, Texas mortgage rates sit around 5.88% for a 30-year fixed loan and 5.00% for a 15-year loan. These rates change all the time based on the economy.

Here is the thing most people do not realize. In the early years of your loan, most of your payment goes toward interest. Very little goes toward the principal. This flips over time, but it means those first years feel slow.

"Understanding how much of your payment goes to interest versus principal can help you decide if paying extra each month makes sense for your situation."

The good news? You can control this part of your payment by choosing a less expensive home. A lower purchase price means a smaller loan, which means lower monthly payments.

Property Taxes: The Texas Wild Card

Here is where things get interesting for Texas buyers. Our state has no income tax. Sounds great, right? But Texas makes up for it with higher property taxes.

The average effective property tax rate in Texas is 1.63%. That ranks eighth highest in the entire country. And depending on where you live, it could be even higher.

Let us look at some real numbers:

• Harris County (Houston area): Average annual property tax of $4,416
• Travis County (Austin area): Average annual property tax of $7,319

That Travis County number works out to over $600 per month just in taxes. On top of your principal and interest. On top of insurance.

Property taxes depend on two things: your home's appraised value and your local tax rate. School districts, counties, and special districts all add their own rates together. This is why two homes with the same price can have very different tax bills depending on their location.

If you want to keep your monthly payment low, pay close attention to property tax rates in the areas you are considering. Sometimes moving just a few miles can save you hundreds per month.

Homeowners Insurance: Protecting Your Investment

Every lender requires you to carry homeowners insurance. This protects both you and the bank if something happens to your home.

In Texas, insurance costs vary based on:

• Your location (coastal areas cost more due to hurricane risk)
• The age and condition of your home
• Your coverage limits and deductible choices
• The construction type of your home

Newer homes often have lower insurance costs because they meet modern building codes. Manufactured homes built today are held to strict HUD standards, which can mean competitive insurance rates.

You can shop around for homeowners insurance to find the best rate. Just make sure you have enough coverage to rebuild your home if needed.

PMI: The Down Payment Factor

If you put down less than 20% on a conventional loan, you will likely pay private mortgage insurance, or PMI. This protects the lender if you stop making payments.

PMI typically costs between 0.5% and 1% of your loan amount per year. On a $180,000 loan, that could add $75 to $150 to your monthly payment.

The good news is PMI goes away once you reach 20% equity in your home. You can get there faster by:

• Making a larger down payment upfront
• Paying extra toward your principal each month
• Buying a home that appreciates in value

Some loan programs, like VA loans for veterans, do not require PMI at all. It pays to explore all your financing options.

The 36/43 Rule: What Can You Actually Afford?

Lenders use something called the debt-to-income ratio, or DTI, to decide how much house you can afford. The standard guideline is the 36/43 rule.

Here is how it works:

• Your monthly housing costs (principal, interest, taxes, and insurance) should not exceed 36% of your gross monthly income
• Your total monthly debt (housing plus car payments, student loans, credit cards, etc.) should stay under 43% of your gross income

Let us say you earn $5,000 per month before taxes. Under these guidelines:

• Your housing payment should be $1,800 or less
• Your total debt payments should be $2,150 or less

This does not mean you should max out these numbers. Many financial experts suggest keeping housing costs closer to 25% to 30% of your income. This leaves room for savings, emergencies, and actually enjoying your life.

How Manufactured Homes Change the Math

Here is where the affordability equation gets exciting. Manufactured homes cost significantly less per square foot than traditional site-built homes. This changes everything about the math we just discussed.

A lower purchase price means:

• Smaller loan amount (lower principal)
• Less interest paid over the life of the loan
• Lower property taxes (since they are based on appraised value)
• Potentially no PMI if you can hit 20% down

At Affinal Homes, we offer modern manufactured homes that look and feel nothing like the mobile homes of the past. Check out options like The Charleston or The Graceland to see what today's manufactured homes really look like.

Tips for Lowering Your Monthly Payment

Now that you understand the math, here are some practical ways to keep your payment manageable:

Choose your location wisely. Property tax rates vary dramatically across Texas. Research tax rates before falling in love with a neighborhood.

Consider a manufactured home. The lower purchase price ripples through every part of your payment calculation.

Improve your credit score. Even a small improvement can qualify you for better interest rates. A 0.5% rate difference saves thousands over the life of your loan.

Save for a larger down payment. This reduces your loan amount and might eliminate PMI.

Shop around for insurance. Get quotes from multiple providers. Bundling with your auto insurance often saves money.

Look at different loan terms. A 15-year mortgage has higher monthly payments but much lower total interest costs. Run the numbers for your situation.

The Bottom Line

Your monthly mortgage payment is not a mystery. It is just math. Principal, interest, taxes, and insurance all play their part.

The choices you make about where to buy, what to buy, and how to finance it all affect that final number. By understanding each piece, you can find a home that fits your budget and your life.

Ready to explore affordable homeownership in Texas? Connect with our team to learn more about your options with Affinal Homes. We are here to help you do the math and find the right fit.