Why am I Not Eligible For a Texas Cash-Out Refinance?

Author: Jay Hurst, Co-Founder of Hurst Lending

What is a Texas Cash-Out Refinance?
A Texas cash-out refinance is a type of mortgage loan that allows homeowners to refinance their existing mortgage while also taking cash out of their home equity. Essentially, this type of loan replaces your existing mortgage with a new one while giving you access to the equity you’ve built up in your home. The amount of cash that you can withdraw is limited to 80% of your home’s value, and the proceeds can be used for any purpose, such as home improvements or debt consolidation.

Why You Might Not Be Eligible for Texas Cash-Out Refinance
While a Texas cash-out refinance can be a great option for some homeowners, there are several factors that may disqualify you from this type of loan. Let’s take a closer look at some of these factors.

Loan-to-Value (LTV) Ratio
The loan-to-value ratio (LTV) is the amount of the loan compared to the home’s appraised value. The maximum LTV ratio for a Texas cash-out refinance is 80%, which means if you owe more than 80% of your home’s value, you won’t be eligible for this type of loan. For example, if your home is appraised at $300,000 and you owe $240,000 on your mortgage, your LTV ratio would be 80%, and you can refinance into a lower rate but you don’t have enough equity to take out cash with your refinance. However, if you owe less than $240,000, you are then eligible to take out cash from your property.

Credit Score
To be eligible for a Texas cash-out refinance, you generally need a minimum credit score of 620. Your credit score is a reflection of your creditworthiness and can impact your ability to obtain a loan. If your credit score is lower than 620, you may not qualify for a Texas cash-out refinance.

Home Equity
To be eligible for a Texas cash-out refinance, you must have enough equity in your home. Equity is the difference between the value of your home and the amount of your outstanding mortgage. If you have little or no equity in your home, you won’t be able to take cash out of your home.

Non-Homestead Property
If your property is a non-homestead property, you can take cash out of the property via an investment property cash-out loan or via an investor HELOC. Details on our investment property HELOC can be viewed at:

https://hurstlending.com/investor-loans/investment-property-heloc/

How Hurst Lending Can Help
Navigating the complexities of obtaining a Texas cash-out mortgage loan can be overwhelming. That’s where a mortgage advisor can help. At Hurst Lending, we are based in Texas and we specialize in helping homeowners find the best mortgage options to meet their needs. Our team of experienced mortgage advisors can guide you through the process of obtaining a Texas cash-out refinance and help you determine if you’re eligible.

One way we can help is by reviewing your credit report and credit score to identify any issues that could impact your eligibility for a Texas cash-out refinance. We can also help you calculate your loan-to-value ratio and debt-to-income ratio to ensure you meet the eligibility requirements.

If you’re not eligible for a Texas cash-out refinance, our mortgage advisors can explore alternative options with you. For example, a rate-and-term refinance may be a better fit for your needs if you’re not looking to take cash out of your home.

At Hurst Lending, we’re committed to providing personalized service to each of our clients. We’ll work closely with you to understand your unique financial situation and goals and provide guidance and support every step of the way.

For more details on our Texas Cash Out Refinance program please visit us at:

REFERENCES

https://www.nerdwallet.com/article/mortgages/texas-cash-out-refinance

https://www.usaa.com/inet/wc/mortgage-cash-out-refinance-texas