Texas Home Equity Loan Rules, Procedures, Fees, 3%

Texas Home Equity Loans have a State-mandated cap on fees of 3%.  You also are limited to 80% of your homes appraised value.   You can borrow more if youre doing an investment home equity, cash-out  loan.

As a mortgage broker, I have many banks with different guidelines .  Some banks like people with perfect credit, others dont care as much.  Countrywide, Wells Fargo, WaMu are just a few (hey, Im rhyming!) of my most popular banks.  When working with a  mortgage broker like Mylendingplace you simply have more options than a retail bank down the street.   You also save TIME since talking with me is like talking with 20 banks at once.

Also,  mortgage brokers must disclose all our fees.   Banks are not required to do so.

Speaking of mortgage fees on Home equity loans, did you know you dont always have to pay your fees when you want to do an Home Equity loan?  Some banks will pay most of your closing costs .  Call my office at 996-8194 or my cell 577-2958

Many people don’t know you can also do an equity cash out loan on your investment property.   In fact, Texas state law  allow you to net more from your investment property equity loan than your own home .

So if you have car loans, student loans, credit cards that need to be consolidated into one note, maybe it’s best to consolidate this debt to a mortgage you’re not actively paying.   Sure, if the mortgage is in your name your ultimately responsible, but having renters pay your home loan gives you leverage.

www.acu.edu )

For example, if you’re paying $750  out each month towards car, credit cards, student loans you can (a) continue to pay these debts until they’re gone or (b) consolidate them into your personal mortgage.   (Even if the cash out refinance raises your house payment $200/month it’s still better than paying $750, right. )  But if you have an investment property with equity,  you have a third option; (c)refinance the debt into your investment property.

For example, lets say your cash-flowing $200/month on your investment property.  If the home equity causes you to  stop cash-flowing  –and you now just break even -it’s still better than paying $750 out.   Right?

I’m not a CPA, but there might be some tax-advantages to any losses associated with investment properties.   Call your CPA and find out.

For those of you who have equity in their homes or investment properties ask yourself:  Can this equity better serve me?

Is my equity just sitting there growing at 1-2-3-4% when you’re paying high-interest credit cards, student loans and car payments?   Even if you don’t have debt a cash out loan might be good financial decision.   If your home is growing at 1-2-3-4%, maybe you can pull some equity out so you can invest in a home in an area that’s growing more rapidly.

Or maybe there’s a piece of land you want to buy to ultimately build upon.   There are some Lake Travis Lots growing at +8% right now.

www.ut.edu ) they’ll have to rent somewhere, right?  Maybe you should buy their college house now–and while they finish Jr. High/Sr. High the property is appreciating.    Let them live there until they finish school, sell property.  Avoid student loans.

Unless you have 10% to put down now, doing a cash out might just be the first step in a long-term financial plan.   Cash out your equity (on your primary or investment), pay off bills, and buy appreciating assets like real estate which you’ll keep until retirement.

If you’re working with the right mortgage professional, they’ll help you view your mortgage as a tool to achieve a greater end; not just give you a fixed rate.    You can either just get a debt-instrument (mortgage) or you can structure your financial future with it–it’s really about working with the right people.    End of sales pitch.

So ask yourself:  Can the equity in my home better serve me?

Home equity loans aren’t for everyone.  You may not even have the credit score to qualify, but if you’d like me to show you some options just call me.  I don’t charge application fees.

Whenever your considering refinancing your Texas property, you should weigh the costs of the refinance against the benefits.   For example, as a mortgage broker, some of my banks pay most of your closing costs, other banks don’t.

When these banks pay for most of your closing costs you net a lot more from the cash out.   Other banks have better rates–but you have to pay for your title policy and other stuff.    This is one advantage in working with a broker (like me:) vs. your bank down the street, we simply have more options to show you.

As a rule of thumb, if you have a property that’s worth over 200K, it’s probably a good idea to go with a bank that will pay your fees like the title policy as this fee can be around 1% of the loan amount.    And it’s probably a good idea ot waive escrows as creating an escrow account will reduce the amount of $ you net from the cash out.

Investment Cash Outs:    Texas is a strange bird when it comes to home equity loans.  You can actually pull more money out of your investment property than you could with your own home!  This is strange because usually mortgage guidelines become stricter when you move from an owner-occupied unit to a non-owner (investment). But this is one example where it’s better to do the loan on an investment property.

As most of you know, I’m a huge advocate of investment property especially in this age of the no-pension, unreliable 401Ks.    If you’re self-employed, your 401K/retirement plan will probably be your home, so why have at least one investment property?

www.mylendingplace.com .   We are licensed for the entire state of Texas.  If you have a Texas zip code we can do your home loan or investment equity loan.

Jon Spears

512-577-2958

We are a mortgage broker company licensed to do Mortgage Home loans (Equity loans)  in the following Texas Cities: