Cash-Out Refinance In Laredo

Commonly known as a “Texas cash-out,” a Texas 50(a)(6) loan is granted and secured by a lien following the regulations of Article XVI, Section 50(a)(6) of the Texas Constitution, which allows a borrower to withdraw equity from a homestead property under certain conditions.

This loan allows you to take equity out of your house to pay off your existing mortgage. At closing, you will receive a cash payment equal to the value of your equity.

The use of equity withdrawn is unrestricted in the Lone Star State. Use the money to settle a high-interest credit card or personal loan debt, make a down payment on a property, or upgrade your current home.

Texas Cash-Out Rules

Texas is known for strict cash-out rules and requirements. These are the specific rules of a Texas Cash-Out loan:

     1) Credit – a minimum score of 620 is required on all cash-out loans. 

     2) Waiting Period – You can only get a cash-out refinance if you’ve had your previous mortgage loan for at least six months. Furthermore, you cannot receive a fresh cash-out refi unless it has been a year since your previous one.

     3) Maximum Loan-to-Value – The new loan amount must not exceed 80% of the property’s appraised value.

     4) Limited Closing Costs – The lender’s closing costs cannot exceed 2% of the loan amount. Third-party closing costs such as attorney, appraisal, and title insurance fees are not included. It only applies to your lender’s charges, such as loan origination and processing fees.

     5) All Liens Must Be Paid Off – Any existing liens, second mortgages, home equity loans, or HELOCs must be repaid in full before a cash-out refinance may be finalized. This means you might not be able to access as much of your equity.

     6) Waiting Period After Bankruptcy – There is a waiting period to qualify for a Texas cash-out loan after bankruptcy or foreclosure. The waiting period after the discharge of bankruptcy is four years; a short-sale is also four years, and a foreclosure is seven years.

Apply for a Texas Cash-Out in Laredo

With a cash-out refinance, you can get money from the equity in your home right now. Talk to one of our Mortgage Originators to learn more about the Texas section (a)(6) home equity refinancing program and decide if it is right for you. Call (956) 307-3422 now to get in touch.