If you live in Texas and are looking to pull some money out of your house you may be wondering what are the home equity loan rules In Texas? Texas is unique in that it has some very special rules regarding mortgage loans. Some of the rules have actually helped the state weather the mortgage crisis better than some other states. Texas essentially has two types of mortgage refinance loans: 1) Rate and Term Refinance and 2) Texas Cash out Refinance.
A rate and term refinance is a mortgage refinance loan that you might be interested in pursuing if you are want to change the rate or term of your current primary mortgage. For example, if you currently have a 30 year fixed rate mortgage at 7% and would like to change your mortgage to a 5% 15 year fixed rate mortgage, this is the loan that you would want. When mortgage rates drop, this type of home equity loan is popular.
Texas cash out refinance mortgage loans are used when you want to pull equity out of your house. Remarkably, at one time it was illegal to pull equity out of your home if you lived in Texas. Today, you can get cash equity out of your house as long as it does not exceed 80% of the appraised value of your home.
Another home equity loan rule in Texas involves the total loan fees that can be charged for the loan. No more than 3% of the loan value can be charged for all fees associated with the loan including: broker fees, title fees, survey fees, appraisal fees, underwriting fees, etc. This may seem like a good idea for you, the borrower, but it has had the opposite effect of making it harder for you to get a home equity loan if your loan value is under $100,000. Other home equity loan rules in Texas make it difficult to get a to get a Texas cash out refinance loan in less than 30 days. Additionally, you can only get a home equity loan once in a 12-month period. If the interest rates suddenly drop even more significantly after 6 months since your last refinance, you’re out of luck and need to wait another 6 months to act. Texas home equity loan rules are complicated so it’s best you work with a mortgage professional who can help you best.