Texas Cash-Out Refinance Rules
Cash-out refinancing in Texas operates under unique rules defined by Section 50(a)(6) of the Texas Constitution. These rules are more restrictive than in other states and are designed to protect homeowners. Key requirements include: your new loan cannot exceed 80% of your home’s appraised value (loan-to-value), the loan must be a first lien on your primary residence, and you must wait at least 12 days after applying before closing.
There are additional Texas-specific rules to be aware of. You can only have one cash-out refinance on your homestead per year, and fees and closing costs (excluding certain items) are capped. Texas law also restricts FHA and VA cash-out refinances under Section 50(a)(6), so most Texas cash-out loans are structured as conventional. Once a property has a 50(a)(6) lien, future refinances of that loan also carry the 50(a)(6) designation unless you pay it off completely.
Austin homeowners who have built equity through the market’s strong appreciation may benefit significantly from a cash-out refinance for debt consolidation, home improvements, or other financial goals. We understand the Texas-specific requirements inside and out, so contact us to discuss your equity position and find out what is possible.
Cash-Out Refinance
Tap into your home equity for renovations, debt consolidation, investments, or other financial goals. A cash-out refinance replaces your current mortgage with a new, larger loan and puts the difference in your pocket.
What Is a Cash-Out Refinance?
A cash-out refinance replaces your existing mortgage with a new loan for more than you currently owe. The difference between the new loan amount and your current balance is paid to you in cash at closing.
This is one of the most effective ways to access your home equity without selling the property. Homeowners use cash-out refinancing for home improvements, debt consolidation, education expenses, investment opportunities, and more.
In Texas, cash-out refinances are governed by Section 50(a)(6) of the Texas Constitution, which includes specific rules around loan-to-value limits and other borrower protections. We are well-versed in Texas cash-out rules and guide you through every requirement.
Cash-Out Refinance Benefits
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Access Your Equity
Convert your home equity into cash that you can use for virtually any purpose, from home renovations to paying off high-interest debt.
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Single Monthly Payment
Consolidate multiple debts into one mortgage payment. If you are carrying credit card or auto loan balances, a cash-out refi can simplify your finances.
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Home Improvements
Reinvest in your property. Renovations and upgrades can increase your home’s value while improving your daily living experience.
Texas Cash-Out Rules
Texas has unique rules governing cash-out refinances under Section 50(a)(6). Here are the key points:
✓ Loan-to-value: Texas limits cash-out refinances to 80% of your home’s appraised value.
✓ Waiting period: You must wait at least 12 months from closing your current mortgage before completing a cash-out refinance.
✓ One at a time: Only one cash-out refinance is allowed per 12-month period.
✓ Closing costs: Fees are capped at 2% of the loan amount for certain charges under Texas law.
✓ Homestead protection: Your primary residence receives specific protections under Texas homestead law.
These rules are in place to protect Texas homeowners. We make sure your cash-out refinance is fully compliant and structured in your best interest.
Ready to Tap Your Equity?
No pressure, no obligation. Let us walk you through your options and find the right fit for your situation.
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