We are the Experts in Texas Cash Out Loans
We have been doing Texas Cash Out Loans throughout the state for over 13 years. Many other lenders do not actually understand all of the Texas Cash Out laws and may have told you that you could not do a Cash Out Loan in Texas. These lenders are usually not located in our great state and have opted to not become experts in this loan product.
Texas is actually the most regulated state when it comes to taking cash out of your home. As long as you meet normal conventional guidelines and the Texas Cash Out laws, you can take cash out of your home! With the money you receive from your Texas Cash Out loans, you can pay for home improvements, debt consolidation, investment purposes, or any other of life’s reasons.
Can I refinance my current Texas Cash Out Loan using a regular rate and term refinance loan?
Yes! Prior to the passing of Proposition 2 in November of 2017, the old saying was: “Once a Texas Cash out, Always a Texas Cash Out.” This is how lenders informed borrowers that once you did a Texas Cash out, also known as a Texas 50(a)(6), you could not refinance unless you did another Texas Cash out loan, even if you didn’t receive any additional cash. This means a higher interest rate and higher closing costs. The new loan had to follow the same laws and lenders hit you for the same risk as before.
Starting Jan 1st of 2018, Texas homeowners can refinance a seasoned Texas Cash Out Loan as a regular refinance and take advantage of a lower interest rate and closing costs. This also allows you to be eligible for other beneficial programs like VA or FHA loans.
What are some of the Texas Cash Out Laws that affect Texas Homeowners?
Texas Cash out laws are pretty extensive, but we make sure to keep up with the laws and can provide the most up to date information for our clients. The Texas Cash out loan was introduced in 1997 and has been recently revised in 2017. Wiser Lending is on the front lines to deliver Texas Cash Out Loans that benefit Texas Homeowners that comply with the amended cash out laws as well as any future changes that may occur.
PER TEXAS STATE LAW YOU CAN ONLY BORROW 80% OF THE VALUE OF YOUR HOME
For example:
- $200,000 Estimated Value
- x 80%
- $160,000 Max Loan Amount
Then you have to subtract how much you currently owe on the home and any closing costs that are associated with the loan as well.
- $160,000 Max Loan Amount
- – $100,000 Current Balance plus Closing Costs
- $60,000 Cash to you
YOU CAN DO A TEXAS CASH OUT ON AN AGRICULTURAL HOMESTEAD PROPERTY
Prior the passing of Proposition 2 in November of 2017 you could not do a Texas Cash out on an agricultural property that you claimed as your homestead or primary residence. Now Texas farmers and ranchers have the opportunity to access the cash they need.
A TEXAS CASH OUT MUST CLOSE IN THE OFFICE OF A TITLE COMPANY OR ATTORNEY AND CANNOT CLOSE BEFORE 12 DAYS OF YOU ACKNOWLEDGING “THE TEXAS 12 DAY DISCLOSURE”
This is a little inconvenient, but all lenders must abide by this law. A true Texas Cash out lender will account for this and will inform you that your closing will have to be scheduled to close in a title company or attorney’s office and cannot close with a mobile notary. Also, one of the key disclosures is the “Notice Concerning Extensions of Credit”, which has been nicknamed the Texas 12 Day Disclosure. Here you are shown all the Texas Cash Out Laws and the loan cannot be consummated before 12 days of you signing it.
YOU CAN ONLY DO A TEXAS CASH OUT ONCE EVERY 12 MONTHS
If you have enough equity you will have to wait 12 months before you can do another Texas Cash out Loan. This is per Texas State Law and not a lender guideline.
YOU CAN ONLY HAVE 1 CASH OUT/EQUITY LOAN AGAINST YOUR HOME AT ONE TIME
If you have a 2nd mortgage or HELOC (Home Equity Line of Credit) you will have to roll that loan in and pay it off along with any 1st lien mortgage you have in order to get the cash from your home.
Do the same laws apply for an Investment/Rental Property in Texas?
If you are wanting to cash out on an investment/rental property, these Laws DO NOT apply and you are only subject to standard Cash Out Refinance guidelines like any other state.
The Texas Cash Out Laws only apply to your Texas Homestead Property or Primary Residence. There are a lot of lenders out there that just group together all cash out loans in Texas as Texas 50(a)(6) loans but this is incorrect.
Contact the Texas Cash Out Loan Experts Today
If you have been told by other lenders that you could not do a Cash Out Loan in Texas, contact Wiser Lending today! Along with our expertise you can expect great rates and low closing costs. Since we are a local wholesale company we can deliver excellent quality, great value and customer service that is second to none. Contact us today and make the Wiser Choice for Texas Cash out Loans!