How to Access Your Equity With a Texas Cash-Out Loan

Does Texas allow cash-out refinance?

Real estate is one of the largest investments that people make in their lifetime. For many Texas homeowners, their home is not only a place to live but also a source of financial stability. However, homeowners may find themselves in need of cash for various reasons such as paying for home improvements or consolidating debt. In such cases, cash-out refinance can be a viable option. Today, we will discuss what a cash-out refinance is, how it works, and whether it is allowed in Texas.

For more details on our Texas Cash-out Refinance program please visit us at: https://hurstlending.com/conventional-loans/cash-out-refinance-texas/

What is Texas Cash-out Refinance?

A cash-out refinance is a type of mortgage refinance in which a homeowner refinances their existing mortgage for an amount greater than what is owed and receives the difference in cash. The new mortgage pays off the old mortgage, and the homeowner receives the remaining amount in cash.

For example, suppose a homeowner has a mortgage of $200,000 on a Texas home worth $300,000. If they choose to do a cash-out refinance for $240,000, the new mortgage pays off the old mortgage of $200,000, and the homeowner receives $40,000 in cash. The new mortgage will have a higher balance than the old mortgage, and the homeowner will have a new interest rate and payment.

How does Texas Cash-out Refinance work?

A cash-out refinance works similarly to traditional mortgage refinance. You simply apply for a new mortgage. Once you have completed the application, we will pull your credit, evaluate your credit score and history, analyze your income, and calculate the debt-to-income ratio to determine if you qualify for the loan. If you qualify, we will appraise the home to determine its current value.

We will then offer you a new mortgage that pays off the old mortgage and provides cash-out based on the equity in the home. You can then use the cash for any purpose, such as home improvements, debt consolidation, or other expenses.

Are Cash-out Refinances allowed in Texas?

Yes, cash-out refinances are allowed in Texas. However, Texas has specific rules and regulations that must be followed when doing a cash-out refinance. These rules are designed to protect homeowners from excessive debt and to ensure that they have the ability to repay the loan.

One of the rules in Texas is that the maximum loan-to-value (LTV) ratio for cash-out refinance is 80%. This means that the new mortgage cannot exceed 80% of the home’s value. For example, if a home is worth $300,000, the maximum loan amount for cash-out refinance is $240,000 ($300,000 x 80%).

Another rule in Texas is that the homeowner must have owned the home for at least 12 months before you can do a cash-out refinance. This rule is designed to prevent homeowners from using cash-out refinance to purchase a home and immediately take out cash. We are a Texas based cash-out lender and we can help you navigate these local Texas laws. As a Texas cash-out lender based in Dallas Texas, we know Texas laws and can help you access your equity while complying with the Texas Constitution.

Conclusion:

The Texas Cash-out refinance can be a useful tool for homeowners who need cash for various reasons. Texas allows cash-out refinance but has specific rules and regulations that must be followed. Homeowners considering cash-out refinance should consult with their lender, and evaluate their financial situation and determine if it is the right option for them.
Hurst Lending is a trusted Texas cash-out lender who can help homeowners navigate the process of cash-out refinance in Texas. With years of experience and a team of experts, Hurst Lending can provide homeowners with the guidance and support you need to make informed decisions about your mortgage. Whether you need to consolidate debt, finance home improvements, or cover other expenses, Hurst Lending can help.

For more details on our Texas Cash-out Refinance program please visit us at: https://hurstlending.com/conventional-loans/cash-out-refinance-texas/

REFERENCES

1. Texas Cash Out Refinance Laws – https://www.biggerpockets.com/blog/texas-cash-out-refinance-laws  – This article explains the laws and regulations related to cash-out refinancing in Texas, including the maximum loan amount, waiting periods, and fees.
2. Texas Cash-Out Refinance: What You Need to Know – https://www.nerdwallet.com/article/mortgages/texas-cash-out-refinance This article provides a detailed overview of Texas cash-out refinancing, including the eligibility requirements, pros and cons, and alternatives to consider.
3. Texas Cash-Out Refinance: What You Need to Know – https://www.nerdwallet.com/article/mortgages/texas-cash-out-refinance This article provides a detailed overview of Texas cash-out refinancing, including the eligibility requirements, pros and cons, and alternatives to consider.

About Scott Bailek

In addition to being one of the founders of Hurst Lending, I am also an attorney and real estate investor. I have a portfolio of residential and commercial properties. I have been helping our customers buy, sell, and refinance their homes since 2000. Our personalized approach to the home buying process includes a suite of services that solve common hurdles in the home buying process. Have you ever experienced the frustration of Losing your dream home in a bidding war; Trying to buy before you sell; Had your buyer fallout; or Being on a fixed income and needing your equity to purchase a new home? Our Industry-leading suite of Dominate with a Cash Offer line of credit/short-term loans solves these issues. We also offer a suite of real estate investor loan products and a full suite of conventional, VA, FHA, construction, and traditional home loans.

Please feel free to contact me directly if I can help provide a loan for your next purchase or refinance, or even if you just want advice on how to get started or expand your real estate investing activities.

Scott E. Bialek
Co-Founder, Hurst Lending
sbialek@hurstlending.com

*Please note that this article is not intended to provide legal advice. You should contact your own attorney to understand the legal protections that are available to you when you purchase or refinance real estate.