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Home Equity Loans in Texas
A few notes of importance:
Before applying to obtain a cash out loan in Texas, you have to realize that you are limited, by State Law, to a maximum of 80% LTV for the new loan. So, if your house is worth (appraised value) of $200,000, then the maximum loan you can get, including any/all closing costs involved is $160,000. So, if you currently owe more than $160k on your current mortgage on the house, you wiil not be able to obtain a home equity loan in Texas. I only say this to save you some time and effort if it is your desire to get cash out or obtain a debt consolidation loan on your homestead property. You can also use this figure to estimate as to how much cash will be available to you from your new loan as a maximum amount.
You can also expect that your options will be more limited than if you were looking to simply do a rate/term refinance (refinance the balance of an existing loan) or purchase a home. Your options are more limited because not all lenders will do Texas Cash Out loans. The reasons are a combination of them not willing to adjust to the more stringent documentation requirements of the Texas Home Equity loan, some are simply because they believe the documentation and legal restrictions are simply too much of an additional burden on them to offer these types of loans. Understand that while the process itself is not that different from the consumer stand point, from a lenders stand point the differences are more unique and do require the lenders to essentially have a seperate set of documents and, most likely, additional staffing just to manage and keep up with any/all changes to Texas Law regarding these loans.
The application process will be essentially the same as any other mortgage loan. You contact your mortgage broker or one or more mortgage lenders, give them your information and you are on your way. Once your applciation and credit have been evaluated, you will, as in any other mortgage transaction, receive a Good Faith Estimate and Truth in Lending within 3 days of you giving your information on an application. This can be used to compare your offers and to help you make an educated decision as to which lender/broker to go with. Once you have made the decision as to which company you will use, you will then be sent a disclosure package which will contain initial RESPA disclosures, other state required forms, lender required forms, and a list of items that you will need to provide along with these documents in order to get your loan completed. I have another section for disclosures (posting to be completed shortly), so I won't go into the specific disclosures other than the ones that apply strictly to Texas Cash Out loans.
You can expect your loan to take longer than a standard mortgage loan. The reason is that Texas Law requires a 12 day cooling off period, so, your transaction cannot take place for at least 12 days after you sign that document which essentially states your rights as a consumer. In most cases, the delay may only be a couple of days as during that time period the normal other items can be taken care of simultaneously, ie., the appraisal, preliminary title report, and the gathering of the required documents from you, the consumer. I am simply saying that if you are anticipating your loan to done inside of two weeks, then you know now, that it is simply not possible.
Once your documents are in the hands of the company you chose, and the appraisal and title work are done, then the loan is underwritten and final approval is given as in any other mortgage transaction. At this time, there may be some outstanding conditions, or other documentation that may be required to be provided due to individual circumstances and/or is something was simply left out or missing from your file. Once those documents are provided, and your loan is cleared of all pending conditions or documentation, then the closing time/date is set and your documents are sent to the title company which prepares the documents for closing.
One item of note here, Texas Cash Out loans are required to be closed at a title company location, they cannot be closed in the customer's home as some mortgage transactions are. This is strictly forbidden by Texas Home Equity Lending Laws, so don't expect anyone to come to your home out of convience for you to close your loan, it just won't happen in Texas.
Additionally, once your closing is set, it is a requirement that each owner of the property be given the HUD-1 settlement statement at least 24 hours prior to closing the loan. If any changes are made to the settlement statement before closing, then another 24 hours must be allowed before closing the loan, again, this is not optional. The reality is, in my opinion, this is actually a very good thing and one of the better laws that Texas has pertaining to home equity lending.
The fact that the consumer gets to see the actual HUD-1 settlement statement a day before the loan closing gives them the opportunity to ask questions and to make certain that everything is correct OR as stated on their initial Good Faith Estimate. This means that there can be no surprises at the closing table. If it were up to me, all consumers would get the HUD-1 one day prior to closing, that way all questions can be eliminated and it would make the closing go that much smoother as you would already be aware of exactly what the settlement statement has on it before you get to the closing table - that is for another discussion.
After you sign the documents there is a 3 day right of recission, as on all mortgage refinance transactions on owner occupied homes. This means, quite simply that once you sign, you are given copies of all documents and given 3 business days (Saturdays count) to review all documents and make your final decision as to whether or not you want the loan. Keep in mind that the decision is YES, unless you decide to say no. So, if you sign documents on Monday, you are given until midnight of Thursday to cancel the transaction, you loan funds on Friday. Friday is too late to cancel. So, if you are going to cancel, make cetain that you notify the title company as soon as possible but you only have until Thursday to do it.
Once your loan funds and you are given your proceeds (cash or payoff sent off), then you are done. Keep in mind that you cannot complete another Texas Cash Out loan for 12 months (1 year) to the day of your loan funding, without exception. You can't even sign the initial disclosures on a new loan until after that 1 year is up. The reason I mention this is so that you realize that you only get one shot a year to do a loan like this, make sure you get what you need the first time because it will be a long time before you can do it again.
Any questions pertaining to this information can be emailed to me or you may simply comment on this post and I will respond back to you.
My next article will be about the what is required for a mortgage loan.
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MORE RESOURCES updated Mon. August / 02 / 2021
Today's mortgage refinance rates hold at bargain lows, 15-year rates dip again | July 28, 2021 - Fox Business
Refinance Rates Today, Aug. 2 | Rates falling The Mortgage Reports
Low Appraisal: Why It Happens and How to Avoid It Credible News
Mortgage Rates Hit a New 5-Month Low at 2.88%. Why the Lowest Rates You See Aren’t What You’ll Get - NextAdvisor
Mortgage Rates Hit a New 5-Month Low at 2.88%. Why the Lowest Rates You See Aren’t What You’ll Get NextAdvisor
KNOWLEDGE CENTER: Feeling left out of the housing market boom? Why refinancing your current home may be a better option [Column] - The Mercury
KNOWLEDGE CENTER: Feeling left out of the housing market boom? Why refinancing your current home may be a better option [Column] The Mercury
Ally Home launches RefiNow™ to provide greater access to mortgage refinance options for homeowners - Yahoo Finance
Ally Home launches RefiNow™ to provide greater access to mortgage refinance options for homeowners Yahoo Finance
New Biden mortgage relief plan cuts payments by 25% A new mortgage relief plan from President - The Mortgage Reports
New Biden mortgage relief plan cuts payments by 25% A new mortgage relief plan from President The Mortgage Reports
How A Mortgage Refinance Can Benefit Homeowners - With Rick Ripma, The "Hard Working Mortgage Guy" - Yahoo Finance
How A Mortgage Refinance Can Benefit Homeowners - With Rick Ripma, The "Hard Working Mortgage Guy" Yahoo Finance
3 ways credit plays into mortgage refinancing Mountain Democrat
Fact Sheet: Biden Administration Announces Additional Actions to Prevent Foreclosures - Whitehouse.gov
Fact Sheet: Biden Administration Announces Additional Actions to Prevent Foreclosures Whitehouse.gov
How to remove PMI from your mortgage Fox Business
Concern over foreclosure increases after forbearance ends 'wildly overestimated,' expert says - Fox Business
Concern over foreclosure increases after forbearance ends 'wildly overestimated,' expert says Fox Business
Battle of the Titans dbusiness.com
Refinancing Your Home Might Get Cheaper This Fall KXLY Spokane
Mortgage rates: Despite low-interest rates, not all homeowners are refinancing. Should you refinance now? - USA TODAY
Mortgage rates: Despite low-interest rates, not all homeowners are refinancing. Should you refinance now? USA TODAY
Mortgage Refinance Options & Types | Refinance Chase News & Stories
How to refinance a mortgage | Mortgage Chase News & Stories
Mortgage Rates Are Rising. Read This Before You Refinance. The Wall Street Journal
7 Steps for a Successful Mortgage Refinance Business Insider
Today's mortgage refinance rates all trend upward for first time since mid-March | June 30, 2021 - Fox Business
Today's mortgage refinance rates all trend upward for first time since mid-March | June 30, 2021 Fox Business
Best mortgage refinance lenders in 2021 Bankrate.com
Conventional Loan vs. FHA: Which Is Right for Me? Credible News
A record 19.4 million homeowners can now save big on a mortgage refinance, as rates hit another new low - CNBC
A record 19.4 million homeowners can now save big on a mortgage refinance, as rates hit another new low CNBC
15 of the best mortgage refinance companies for 2021 Fox Business
Today's mortgage refinance rates see little change as market holds steady | April 1, 2021 - Fox Business
Today's mortgage refinance rates see little change as market holds steady | April 1, 2021 Fox Business
New mortgage refinance program for lower-income homeowners opens The Seattle Times
Refinance Terms & Rates | Refinance Chase News & Stories
Mortgage Refinancing Initiative to Help Lower-Income Borrowers The Wall Street Journal
Today's mortgage refinance rates: 30-year rates plunge below 3% for the first time in 34 days | April 16, 2021 - Fox Business
Today's mortgage refinance rates: 30-year rates plunge below 3% for the first time in 34 days | April 16, 2021 Fox Business
Fannie Mae’s refinance program for lower-income homeowners starts next week. Here’s what to know - CNBC
Fannie Mae’s refinance program for lower-income homeowners starts next week. Here’s what to know CNBC
Jumbo Mortgage Refinance Rates for July 2021 NextAdvisor
Current 30-Year Refinance Rates for August 2021 NextAdvisor
Should you refinance your mortgage in 2021? Bankrate.com
Today's mortgage refinance rates show little change: only 30-year rates drop | June 21, 2021 - Fox Business
Today's mortgage refinance rates show little change: only 30-year rates drop | June 21, 2021 Fox Business