How To Get A Loan To Build A House

Building a house is an exciting journey, but finding and securing the right loan can seem daunting.

This guide will walk you through the steps to get a loan for home construction, from assessing your financial situation to converting your construction loan into a permanent mortgage.

Let’s get into the details so you can finance the construction of your dream home – without experiencing any hiccups along the way.

1. Assess Your Financial Situation

Before applying for a construction loan, you need to evaluate your financial health.

This step means checking your credit score, figuring out your budget, and understanding the challenges of obtaining home construction loans.

Check Your Credit Score

Start by checking your credit score. A strong credit score increases your chances for loan approval. It could even lower the interest rates you're offered.

Determine Budget

Next, figure out how much you can afford. Look at your savings for a down payment and calculate what you can manage for monthly payments.

We recommend using a calculator like this one from Mortgage Calculator to get started.

A young woman assesses her financial situation while seeking a construction loan

2. Gather Documentation

Once you understand your finances, you need to gather documentation. Without the right documents, construction loans are extremely difficult to secure. You'll need to provide proof of income, your credit history, employment verification, and details of any existing debts.

Here are the items you'll need to make sure you're fully prepared to apply for a construction loan.

Proof of Income

Collect recent pay stubs, tax returns, and W-2 forms. These documents show your income and help lenders see that you have the ability to repay the loan. You can also include bank statements to provide a clearer picture of your financial health.

Credit History

Download a copy of your credit report, which highlights your credit score and helps lenders understand your debt-to-income ratio.

The debt-to-income ratio is the percentage of your monthly income that goes toward paying debts. It helps lenders assess your ability to manage monthly payments and repay the loan.

Employment Verification Letter

Secure a letter from your employer or other employment verification documents that show you work where you say you do. These prove job stability and income consistency, which lenders need to see before they'll let you borrow money.

Debt Information

List all existing debts, such as credit card balances and other loans. Lenders will evaluate this to understand your current financial obligations and assess your ability to take on additional debt.

3. Research Loan Options

This step involves exploring various types of loans available for construction projects, such as construction loans, owner-builder construction loans, and traditional mortgage loans. Understanding the differences between these loans and why construction loans can be harder to obtain than conventional mortgages is crucial.

What Are Construction Loans?

Construction loans are short-term loans specifically designed to cover the cost of building your home. These loans are disbursed in stages, known as progress payments, as the construction milestones are completed. Once the construction is finished, these loans often convert into a permanent mortgage, known as a construction to permanent loan. This type of loan ensures you have the necessary funds throughout the construction process.

Types of Construction Loans:

  • Owner-Builder Construction Loans: These loans are for individuals who plan to act as their own general contractor. They can be more challenging to obtain because they require significant experience and a detailed plan.
  • Construction to Permanent Loans: These loans initially cover the construction costs and then convert into a permanent mortgage once the home is built. This option simplifies the financing process as you only need to close on one loan.
  • Stand-Alone Construction Loans: These loans cover only the construction period. After construction, you must obtain a separate mortgage to pay off the construction loan, resulting in two closings.

Why Are Construction Loans Hard To Get?

Construction loans involve higher risks for lenders, who need assurance that the project will be completed successfully and that you can handle the repayments. This is why the approval process is so strict. It requires detailed plans, a strong credit score, and solid financial documentation. Lenders typically look for borrowers with a low debt-to-income ratio, stable income, and a significant down payment. They also need to see a comprehensive construction plan and budget to ensure the project is feasible.

Traditional Mortgage Loans vs. Construction Loans:

  • Traditional Mortgage Loans: These are used for purchasing fully constructed homes. They have more straightforward approval processes and typically offer better rates and terms compared to construction loans.

Conventional Mortgages: These loans follow the guidelines set by Fannie Mae and Freddie Mac and are suitable for buying existing homes. They can be used for refinancing as well.

A young couple closes on a construction loan and signs documents

4. Get Pre-Approved

Getting pre-approved for a loan helps you understand how much you can borrow and signals to builders and sellers that you are a serious buyer.

Apply For Pre-Approval

Start by approaching banks or mortgage lenders to get pre-approved for a loan. They'll perform a review of your financial status. At this stage, they'll assess your income, credit score, and overall financial health.

Pre-Approval Letter

After the review, obtain a pre-approval letter from your lender. This letter indicates the loan amount you qualify for so you can set a realistic budget and streamline the loan application process once you find the right builder and finalize your plans.

5. Find A Builder And Finalize Plans

Now that you're approved, it's time to find a builder. This section covers how to select a reputable builder and finalize detailed construction plans and costs to secure an owner-builder loan.

Choose a Builder

Research and select a reputable builder with a solid track record and reputation.

Look for a general contractor or an owner builder near you who has experience in constructing homes similar to the style of your dream home.

Check reviews, ask for references, and visit some of their completed projects to make sure they meet your standards.

Finalize Building Plans

Work closely with your builder to finalize the design of your home and get a detailed construction plan with a precise cost estimate.

This plan should include timelines, materials, and all costs involved.

6. Submit Loan Application

Here's how to submit your application and get a construction loan.

Complete And Submit Your Application

Submit a detailed loan application with your chosen lender. This application should include all the documentation mentioned earlier, which includes proof of income, credit history, and employment verification.

Clearly state the loan amount you need and whether it will be a lump sum or disbursed in stages.

Include Plans And Costs

Include the construction plans with your application, as well as a detailed cost estimate and the construction timeline from your builder. This helps the lender assess the project's feasibility so that they can see your construction costs align with the amount of your loan.

7. Get Appraised and Approved

The appraisal and approval process helps to be sure that your proposed home and financial situation meet your lender’s requirements for construction loans.

Get An Appraisal

The lender will appraise your proposed home's value based on the construction plans and the property.

This appraisal determines the future value of the home once it's built, which the lender needs to know to justify granting the loan.

In some cases, lenders might also consider existing home equity loans as part of the evaluation.

Get Your Loan Approved

After the appraisal and review of all submitted documents, the lender will decide on the loan approval. If everything meets their requirements, they will approve the loan.

The approval process makes sure that your construction-only loan (or your mortgage loan) is based on a full assessment of your financial situation and the proposed home's value.

8. Close On The Loan

Closing on the loan finalizes the financing for your construction project. This step includes signing loan documents, paying closing costs, understanding how construction loan interest payments work, and reviewing the disbursement schedule to keep progress payments during the construction phase consistent and smooth.

During the loan closing, you'll sign loan documents, pay the required closing costs, and finalize the terms of your loan.

Understand Your Disbursement Schedule

Disbursements are the portions of the loan amount released to the builder. Funds are usually released in stages, known as progress payments, based on the completion of specific construction milestones.

Make sure you understand the disbursement schedule for your construction funds. This schedule makes sure that the builder receives funds as needed while keeping the project's timelines on track.

9. Begin The Construction Phase

The construction phase involves regular inspections and progress payments to ensure the project stays on schedule.

Here's how construction loan lenders will monitor the construction process and release funds based on project milestones, ensuring construction loans cover all necessary expenses.

Regular Inspections

During the construction phase, the lender may require regular inspections at various stages.

These inspections ensure that the construction is proceeding as planned while sticking to the agreed-upon standards.

An engineer shows solar panels to a client during an inspection at a construction site

Progress Payments

Funds are released to the builder based on the completion of specific milestones. These progress payments are tied to the construction timeline and ensure that the builder receives the funding they need as each phase of the project is completed.

10. Convert Your Construction Loan To A Mortgage

Converting your construction loan into a permanent mortgage is the final step in the loan process. It involves one final inspection of the completed home, then you can transition to regular monthly mortgage payments.

Final Inspection

Once construction is complete, your lender will perform a final inspection to verify that the house has been built according to your plans.

Mortgage Conversion

After the final inspection, the construction loan becomes converted into a permanent mortgage.

This process is called mortgage conversion, and it involves transitioning from interest-only payments to regular monthly mortgage payments.

Converting your construction loan to a mortgage loan finalizes your home financing and lets you start repaying the loan under the terms of your permanent mortgage.

Tips For Success

Here are some tips to help you navigate the loan and construction process more smoothly.

  • Stay Organized: Keep all documents and communications organized from day one. This will help you meet deadlines and be certain you have everything you need when it's time to submit paperwork or address any issues.
  • Maintain Good Communication: Regularly communicate with your builder and lender to stay updated on progress and any potential issues. Open lines of communication can prevent misunderstandings and keep the project on track.
  • Monitor Finances: Ensure you have enough funds available for any unexpected expenses during construction. Having a financial cushion can help you handle unforeseen costs without stalling the project.

Construction Loan FAQs

Is It Difficult To Get A Loan To Build A House?

Getting a loan to build a house can be more challenging than getting a traditional mortgage because there are added risks and complexities for lenders. They need to know that the construction will be completed on time and within budget before they can grant a loan.

This is why they have such strict requirements for construction loans. You'll need a solid financial foundation, a good credit score, detailed construction plans, and thorough documentation of your finances before lenders will consider your for approval.

Should I Pay Off My Land Before Building?

Paying off your land before starting construction can make the loan process simpler and improve your financial position. Without a land loan, you might have a better debt-to-income ratio, which lenders favor.

But it's not always necessary to pay off your land first.

Some lenders offer construction loans that include the cost of the land. Discuss your options with different lenders to determine the best strategy for your situation.

Is It Cheaper To Build Or Buy A Home?

The cost of building versus buying a home depends on factors including location, material costs, and labor.

Building a new home allows you to customize it to your preferences, but it can be more expensive and time-consuming.

Buying an existing home is usually quicker and might be cheaper, especially in a buyer's market. But it comes at the cost of customization. Consider your budget, timeline, and the housing market conditions when deciding whether to build or buy.

How Can I Build A House While Paying A Mortgage?

Building a house while paying a mortgage on your current home can be challenging but manageable with proper planning. Here are some strategies:

  • Budgeting for Dual Payments: Create a detailed budget that accounts for your current mortgage and the costs associated with building your new home.
  • Exploring Bridge Loans: A bridge loan can provide temporary financing to help cover the gap between buying your new home and selling your current one.
  • Refinancing Your Existing Mortgage: Lowering your monthly payments through refinancing can free up funds for construction expenses. Planning ahead and consulting with financial advisors can help ease the financial burden during this period.

Can You Get A Mortgage On A House You Want To Build?

You can get a home construction loan specifically designed for building a new house. Construction loans cover the costs of construction and usually convert into a traditional mortgage once the home is built.

This type of loan provides funds as needed throughout the building process, so you know you have the money needed at different stages of construction.

Which Bank Is Best For A Construction Loan?

The short answer is that it depends on where you build. When looking for the best bank for a construction loan, compare interest rates, terms, and customer reviews from various lenders.

Some banks specialize in construction loans and may offer better rates or more flexible terms.

It's important to find a lender who understands the complexities of construction financing and can guide you through the different steps of the process.

Talking to multiple lenders and getting quotes can help you make an informed decision.

Is A Construction Loan Easier To Get Than A Home Loan?

Generally, construction loans are harder to obtain compared to traditional home loans. This is because construction loans involve more risk for lenders.

To be approved for a construction loan you'll need thorough documentation, a solid financial background, and a detailed plan showing how your builders will carry out the project without a hitch.

Preparing all necessary documents, having a good credit score, and demonstrating a stable income can help the approval process go smoothly.

How Does Construction Loan Interest Work?

Construction loan interest works differently than traditional mortgage interest. During the construction phase, you'll typically make interest-only payments on the amount disbursed. This means you only pay interest on the funds that have been drawn, not on the entire loan amount.

This means that during the building process, you only pay interest on the money being used at each stage of construction.

Once the construction is complete, the loan usually converts into a traditional mortgage, and you'll start making regular monthly payments.

If you're looking for a construction loan to help you build in the Houston area but are unsure of where to start or who to trust, schedule a call with Dunn & Stone today. We'll connect you with our partners to help you get the loan you need to start building the home of your dreams.

Company
Liberty Home Guard
American Home Shield
First American Home Warranty
Cinch Home Services
Old Republic Home Protection
HomeServe
Choice Home Warranty
Home Warranty Of America
Texas Coverage?
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes
Covers Major Home Systems & Appliances?
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes
✅ Yes (via separate plans)
✅ Yes
✅ Yes
Monthly Premium
Starts at $49
Starts at $39
Starts at $42
Starts at $35
Starts at $45
Starts at $7
Starts at $35
Start at $46
Service Fee
Typically $75–$125
$100–$125 (customer selects at sign-up)
$75–$125
$100–$150 (customer selects at sign-up)
Typically $100
$0–$100 depending on plan
$85 (fixed)
$50-$100
Typical Response Time
24–48 hours
Varies (reports range from 24 hours to multiple weeks)
Often within 24 hours
Often within 24 hours
Varies by region
Varies by location
Varies by region
48 hours
Average Rating
4.6/5.0 on Trustpilot (5,000+ reviews)
4.2/5.0 on Trustpilot (12,000+ reviews)
4.0/5.0 on Trustpilot (16,000+ reviews)
4.1/5.0 on Trustpilot (4,000+ reviews)
4.1/5.0 on Trustpilot (13,000+ reviews)
4.4/5.0 on Trustpilot (1,000+ reviews)
4.0/5.0 on Trustpilot (49,000+ reviews)
3.9/5.0 on Trustpilot (2,000+ reviews)
Pros
  • Dual AC coverage in the base plan, ideal for Texas heat
  • High customer satisfaction
  • Over 30 add-ons for extra coverage
  • Mobile app and live chat support
  • No maintenance history required for claims
  • Covers appliances and systems of any age
  • Offers coverage for preexisting conditions
  • Mobile app allows you to request service anytime, anywhere
  • High coverage limits ($7,000 for appliances, unlimited for systems)
  • Claims often resolved within 24 hours
  • Optional upgrade covers issues related to poor installation
  • Budget-friendly plans start at $35/month
  • $500 homeowners insurance deductible reimbursement
  • 180-day workmanship guarantee, longest on this list
  • Covers rust, corrosion, and unknown pre-existing conditions
  • Great for normal wear and tear on HVAC, electrical, and plumbing
  • Straightforward plans
  • Lower-than-average service request fees
  • Several plans come with no service fees
  • Highly flexible, system-specific plans tailored to your needs
  • Affordable entry pricing starts at $7/month for individual plans
  • Fixed $85 service fee helps homeowners budget confidently
  • Broad home warranty cover for HVAC, appliances, and more
  • Includes optional coverage for issues like roof leaks
  • Generous HVAC coverage, ideal for Texas heat
  • Transparent pricing, rare in the industry
  • Wide range of add-on options for upscale homes
Cons
  • Lower coverage limits on some repairs raise out-of-pocket repair costs
  • Some service fee options are unclear until you begin the sign-up process
  • Occasional complaints about delays in technician assignment
  • Higher premiums compared to more affordable plans
  • Few add-on coverage options
  • Some complaints of poor customer service and long claim resolution times
  • Less budget-friendly for cost-conscious homeowners
  • Limited add-on coverage selection
  • Does not cover pre-existing conditions, limiting protection for older homes
  • HVAC coverage not included in the “Repair Only” plan
  • No roof leak coverage
  • Higher service request fees than competitors
  • Limited add-on options
  • Comprehensive coverage requires stacking plans
  • Bundled options are confusing, not necessarily comprehensive
  • Frequent reports of claim denials
  • Mixed customer service reviews
  • Fewer added perks than competitors
  • Some customers report slow claim processing
  • Add-ons can raise the overall cost quickly if you're not careful

Our Top Pick: Liberty Home Guard

If you're looking for the best home warranty company in Texas, Liberty Home Guard stands out as the top choice in 2025. 

It’s not the cheapest option on the list, but it consistently ranks as one of the top home warranty providers thanks to its strong home warranty coverage, fast service, and unmatched flexibility.

Liberty’s plans are designed for real life in Texas, where dual air conditioning systems, major home systems, and high summer temps are the norm. 

It’s one of the few home warranty companies that includes coverage for two electric AC units in its standard plan.

What also sets Liberty apart is its level of customization. 

With over 30 add-on coverage options, homeowners can build a plan that fits their property perfectly, whether they need coverage for a septic system, a swimming pool, or extra laundry appliances. 

This kind of flexibility is rare among other home warranty companies.

It’s not just the coverage options that impress, though. 

Liberty earns high marks from home warranty customers for its responsiveness and customer service. 

You can manage your home warranty contract through their mobile app, which many Texas homeowners love for the convenience when filing a claim or tracking repairs.

Visit Liberty Home Guard's website to view plan details or explore Liberty Home Guard’s plans directly.

Quick Facts: Liberty Home Guard

Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Starts at $49
Service Fee
Typically $75–$125
Typical Response Time
24–48 hours
Average Rating
4.6/5.0 on Trustpilot (5,000+ reviews)
Pros
  • Dual AC coverage in the base plan, ideal for Texas heat
  • High customer satisfaction
  • Over 30 add-ons for extra coverage
  • Mobile app and live chat support
Cons
  • Lower coverage limits on some repairs raise out-of-pocket repair costs
  • Some service fee options are unclear until you begin the sign-up process
  • Occasional complaints about delays in technician assignment

Runner Up: American Home Shield

Coming in close behind Liberty, American Home Shield ranks as one of the best home warranty providers in Texas for 2025. 

With over 50 years of experience and broad home warranty coverage that includes preexisting conditions, this provider has built a strong reputation among homeowners with older homes, aging heating systems, and major appliances.

In a 2025 This Old House survey, 44% of Texas homeowners selected American Home Shield as their current provider, making it one of the most widely used Texas home warranty companies.

Our favorite features is the $5,000 HVAC coverage cap per system, which is ideal for the Texas climate. The reason we love it is because A/C repairs are some of the most common (and expensive) home service calls made in the Houston area.

Quick Facts: American Home Shield

Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Starts at $39
Service Fee
$100–$125 (customer selects at sign-up)
Typical Response Time
Varies (reports range from 24 hours to multiple weeks)
Average Rating
4.2/5.0 on Trustpilot (12,000+ reviews)
Pros
  • No maintenance history required for claims
  • Covers appliances and systems of any age
  • Offers coverage for preexisting conditions
  • Mobile app allows you to request service anytime, anywhere
Cons
  • Higher premiums compared to more affordable plans
  • Few add-on coverage options
  • Some complaints of poor customer service and long claim resolution times

Other Great Home Warranty Companies In Texas

While Liberty Home Guard and American Home Shield earned our top spots, they’re not the only Texas home warranty companies worth your attention. 

Several other home warranty providers offer solid coverage, competitive pricing, and reliable service. 

If you're looking for alternatives that still deliver great value and protection for your covered home systems, the options below are absolutely still worth considering.

First American Home Warranty

While it’s a bit pricier than some affordable plans (with monthly premiums starting at $42), First American Home Warranty makes up for it with higher coverage limits and solid protection for both major appliances and covered systems. 

This is especially appealing to owners of high-end homes in Houston.

Some plans offer up to $7,000 in appliance coverage and unlimited HVAC system coverage, which is what makes this company a strong contender for anyone who wants broad, comprehensive coverage (as long as you’re willing to pay a little more for it).

One standout feature is the First American Advantage upgrade, which adds protection for poor installation issues not always covered under standard home warranty plans.

Quick Facts: First American Home Warranty

Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Starts at $42
Service Fee
$75–$125
Typical Response Time
Often within 24 hours
Average Rating
4.0/5.0 on Trustpilot (16,000+ reviews)
Pros
  • High coverage limits ($7,000 for appliances, unlimited for systems)
  • Claims often resolved within 24 hours
  • Optional upgrade covers issues related to poor installation
Cons
  • Less budget-friendly for cost-conscious homeowners
  • Limited add-on coverage selection
  • Does not cover pre-existing conditions, limiting protection for older homes

Cinch Home Services

Cinch Home Services is a strong option for Texas homeowners looking for affordable plans with practical extras. 

With monthly premiums starting at just $35, Cinch is one of the most budget-friendly providers on this list. 

But don’t let the price fool you. It packs in value that rivals bigger names.

One standout feature is its $500 homeowners insurance deductible reimbursement, included with its Complete Home Plan.

 That alone sets it apart from most home warranty coverage options. 

It also covers damage from rust and corrosion, which many home warranty companies exclude despite its usefulness in humid areas like Houston.

Cinch also offers a 180-day workmanship guarantee, six times longer than the industry norm That’s one of the best repair guarantees in today’s market.

Quick Facts: Cinch Home Services

Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Starts at $35
Service Fee
$100–$150 (customer selects at sign-up)
Typical Response Time
Often within 24 hours
Average Rating
4.1/5.0 on Trustpilot (4,000+ reviews)
Pros
  • Budget-friendly plans start at $35/month
  • $500 homeowners insurance deductible reimbursement
  • 180-day workmanship guarantee, longest on this list
  • Covers rust, corrosion, and unknown pre-existing conditions
Cons
  • HVAC coverage not included in the “Repair Only” plan
  • No roof leak coverage
  • Higher service request fees than competitors

Old Republic Home Protection

Old Republic Home Protection keeps things simple. And that’s exactly why many Texans love it.

If you’re the kind of homeowner who wants a no-fuss plan that covers the essentials, this provider might be your best bet.

Their home warranty plans focus squarely on major systems and important appliances (the things that typically break and cost the most to fix).

Customization is limited, but the tradeoff is a more straightforward service agreement and lower out-of-pocket costs.

With monthly premiums starting at $45 and service fees around $100, Old Republic offers better-than-average value.

Quick Facts: Old Republic Home Protection

Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Starts at $45
Service Fee
Typically $100
Typical Response Time
Varies by region
Average Rating
4.1/5.0 on Trustpilot (13,000+ reviews)
Pros
  • Great for normal wear and tear on HVAC, electrical, and plumbing
  • Straightforward plans
  • Lower-than-average service request fees
Cons
  • Limited add-on options

HomeServe

HomeServe offers a different take on home warranty coverage in Texas, and it works well for homeowners who want low service fees and highly targeted protection. 

Instead of bundling everything into one plan, HomeServe allows you to pick and choose the covered systems you care about most, like plumbing, electrical, or HVAC.

To sweeten the deal, several of their plans have no service fees at all. 

That’s a massive advantage if you’re looking to reduce out-of-pocket costs on normal wear repairs.

But because each system is covered under a separate plan, achieving full comprehensive coverage can get pricey. 

You may need to purchase multiple plans to match the kind of protection you’d get from bundled providers like Liberty or options found on American Home Shield’s website.

Quick Facts: HomeServe

Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Starts at $7
Service Fee
$0–$100 depending on plan
Typical Response Time
Varies by location
Average Rating
4.4/5.0 on Trustpilot (1,000+ reviews)
Pros
  • Several plans come with no service fees
  • Highly flexible, system-specific plans tailored to your needs
  • Affordable entry pricing starts at $7/month for individual plans
Cons
  • Comprehensive coverage requires stacking plans
  • Bundled options are confusing, not necessarily comprehensive

Choice Home Warranty

With one of the most affordable home warranty plans in Texas, Choice Home Warranty offers monthly premiums starting at $35 and a predictable, fixed $85 service fee. 

It’s a budget-friendly option for homeowners who want wide home warranty coverage without a complicated pricing model.

Choice’s plans cover both HVAC systems and major appliances, and they include extras that other low-cost providers skip like limited roof leak coverage.

It’s a strong fit for value-seekers who still want protection for high-cost repairs.

However, Choice’s reputation comes with a caveat. 

Despite its large customer base (49,000+ reviews on Trustpilot), it has received criticism for poor customer service and claim denials more frequently than top competitors.

Quick Facts: Choice Home Warranty

Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Starts at $35
Service Fee
$85 (fixed)
Typical Response Time
Varies by region
Average Rating
4.0/5.0 on Trustpilot (49,000+ reviews)
Pros
  • Fixed $85 service fee helps homeowners budget confidently
  • Broad home warranty cover for HVAC, appliances, and more
  • Includes optional coverage for issues like roof leaks
Cons
  • Frequent reports of claim denials
  • Mixed customer service reviews
  • Fewer added perks than competitors

Home Warranty of America

Home Warranty of America (HWA) offers plans designed for both homeowners and real estate professionals, which makes it a versatile choice for a wide range of Texans. 

Known for its transparent pricing and solid HVAC coverage, HWA is a wise pick for those living in hotter climates like Houston where AC systems get put to the test.

Plans start at $46/month, and coverage includes major appliances and systems, with HVAC protection capped at $5,000. 

While the base pricing is competitive, be aware that add-on options can increase costs quickly, especially if you’re customizing coverage for a high-end or custom-built home.

Quick Facts: Home Warranty of America

Feature
Details
Texas Coverage
✅ Yes
Covers Major Home Systems & Appliances
✅ Yes
Monthly Premium
Start at $46
Service Fee
$50-$100
Typical Response Time
48 hours
Average Rating
3.9/5.0 on Trustpilot (2,000+ reviews)
Pros
  • Generous HVAC coverage, ideal for Texas heat
  • Transparent pricing, rare in the industry
  • Wide range of add-on options for upscale homes
Cons
  • Some customers report slow claim processing
  • Add-ons can raise the overall cost quickly if you're not careful

How We Picked The Top Home Warranty Companies Of 2025

Companies with the best home warranties in Texas respond quickly, partner with licensed local contractors, and actually follow through on their repair guarantees.

Here’s the criteria we used to build our list of the top home warranty companies in 2025. The companies on the list needed to meet at least 4 of 5 of these requirements in order to make the list.

Must cover critical systems and appliances

Texas homeowners face unique challenges due to the climate. Houston’s heat and humidity put a serious strain on air conditioning systems, plumbing, and electrical systems, which means warranties that skip these aren’t worth your time.

In fact, in a recent 2025 survey by Texas Homeowner Trends, 63% of respondents ranked air conditioning coverage as their top priority when choosing a home warranty in Texas.

Builders also care. They want home warranty companies that cover the systems and appliances they install to avoid post-sale arguments over repairs.

Must be priced for Texas homeowners

We only selected companies whose plans fall within the average home warranty cost range for Texas in 2025. That’s between $52 and $80 per month. 

This range reflects pricing for the Houston area, which is one of the state’s most active homebuilding markets.

Plans that are too cheap often have low coverage limits. Plans that are too expensive may not offer enough value for what they charge.

Must have strong online reviews

We only considered companies with an average customer satisfaction rating of at least 4 out of 5 stars across sites like Trustpilot.

High scores show how the company handles real-world problems and home warranty service issues effectively.

Must offer fast, reliable service within a maximum of 48 hours

Texas homes can’t afford to wait for repair when the AC unit breaks down in the middle of summer. 

Every company on our list offers quick service calls, a strong contractor network, and local availability for licensed repairs. 

The Bottom Line

There’s no one-size-fits-all when it comes to home warranty coverage in Texas, and that’s exactly why we created this guide. 

From dual AC unit coverage to low service fees and comprehensive plans with high coverage limits, each of the companies we reviewed brings something different to the table.

Here’s the short version:

  • Liberty Home Guard is our top pick for its flexibility, customer satisfaction, and coverage designed for Texas heat.
  • American Home Shield stands out for high HVAC caps and coverage for older homes with no maintenance records required.
  • And for those on a tighter budget or looking for niche protections, companies like Cinch, HomeServe, and First American still offer reliable service — even if they don’t hit every mark.

So which warranty fits your situation best?

Best For First-Time Homeowners: American Home Shield

First-time buyers often don’t know what could go wrong. 

AHS offers peace of mind with broad coverage, no maintenance history requirements, and helpful tech features like 24/7 service requests and live video chat support.

Best For Budget-Conscious Homeowners: Cinch Home Services

Starting at just $35/month, Cinch offers solid protection with extras like rust coverage and a $500 homeowners insurance deductible reimbursement. 

It’s a budget-friendly pick that still comes with a 180-day workmanship guarantee, which is one of the best in the business.

Best For Homeowners Who Want Total Coverage: Liberty Home Guard

With over 30 optional add-ons, dual AC unit coverage in the base plan, and a strong contractor network, Liberty is built for homeowners who want it all. 

It’s the best choice for anyone building a custom home or looking to cover systems that most providers skip.

If you’re building a new home in the Houston area, choosing the right home warranty company is only part of the equation. You also need a builder who cares about long-term quality, not just closing day.

At Dunn & Stone Builders, we partner with trusted home warranty providers and build every home with longevity in mind. 

Contact us today to talk about how we can help you bring your dream home vision to life.

Frequently Asked Questions

What Is The Best Home Warranty Company In Texas?

The best home warranty company in Texas is Liberty Home Guard. It offers fast service, strong customer satisfaction, and plans tailored to Texas homes, including dual AC coverage.

Which Home Warranty Providers Have The Highest Customer Satisfaction?

Liberty Home Guard and American Home Shield lead in customer satisfaction, with 4.5-star or higher ratings on review sites like Trustpilot and the Better Business Bureau.

What Does Home Warranty Coverage Typically Include?

Home warranty coverage usually includes major systems like HVAC, plumbing, and electrical, plus key appliances such as refrigerators, ovens, and washers.

Are All Home Warranty Plans Available In Texas?

No, not all home warranty plans are available in Texas. Only licensed Texas home warranty companies can offer coverage in the state.

Which Home Warranty Companies Offer The Best Repair Guarantee?

Cinch Home Services offers the best repair guarantee, with a 180-day workmanship guarantee that’s six times longer than the industry standard.

How Do I Choose Between Different Home Warranty Providers?

Look for providers with fast service times, high customer satisfaction, competitive pricing, and strong coverage for systems common in Texas homes.

What Should I Look For In Home Warranty Plans For Texas?

Look for home warranty plans that include HVAC, plumbing, and electrical systems, offer reasonable monthly rates, and have a solid contractor network for quick repairs.

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