Do you offer Texas Cash Out Home Equity Loans?

Yes, we do offer cash-out mortgages on primary residences in Texas.

A Texas Cash Out Home Equity Loan is a refinance where you take equity out of your home in the form of cash on your primary residence, or homestead. In other words, you refinance and get cash back, reducing the amount of equity you have in your home.

What is a Texas Cash-Out Home Equity Loan?

A Texas cash-out refinance loan, also known as a Section 50(a)(6) loan, enables homeowners to refinance their current mortgage while extracting equity from their property in the form of cash. This cash can be utilized for anything from home improvements and educational expenses to debt consolidation.

Recent Changes and Rules (Post-2017 Amendments)

In November 2017, amendments to the Texas Constitution made these loans more consumer-friendly:

  • Refinance Flexibility: Homeowners can now refinance their Section 50(a)(6) loan into a non-cash-out refinance loan without the cash-out status and additional fees.
  • Reduced Fees: The maximum fees have been decreased from 3% to 2% of the original loan amount, excluding certain costs like appraisals and title insurance.
  • Expanded Eligibility: Agricultural homesteads can now qualify for these loans, broadening accessibility.
  • Increased Protections: Homeowners may not close a cash-out refinance loan before the first anniversary of the closing date of any other equity loan secured by the same homestead property.

How to Qualify for a Texas Cash-Out Refinance Loan

To qualify, you must meet certain criteria:

  • Credit Score: A minimum FICO score of 620 is typically required.
  • Loan-to-Value Ratio: The maximum LTV allowed is usually 80%.
  • Debt-to-Income Ratio: Your DTI should not exceed 45%.
  • Residency: The property must be your primary residence.