San Antonio Cash-Out Refinance Loans

You’ve probably heard of rate & term refinancing, where the borrower refinances the rate and term of their existing loan. Cash-Out Refinance loans follow a similar structure but with two distinct outcomes. 

The first would be paying the outstanding balance of the previous mortgage, while the second would be getting excess cash. 

Capital Home Mortgage offers cash-out refinancing to interested borrowers in San Antonio. Speak to our mortgage officers in San Antonio to get more details about cash-out refinancing. In the meantime, let’s discuss the salient features of this loan program.

What is a San Antonio Cash-out Refinancing?

A Texas 50(a)(6) loan (home equity/cash-out refinance) is a loan issued and secured by a lien allowed by the rules of Article XVI, Section 50(a)(6) of the Texas Constitution, which permits a borrower to take equity out of a homestead property under specific conditions. This is commonly referred to as a “Texas Cash-Out.”

This financing allows you to refinance your current mortgage while tapping into your property’s equity. This equity is paid to you in cash at closing.

Texas has no restrictions on how you can use your cash-out equity. You may use the funds to pay off existing credit card bills, consolidate loans, pay for medical bills, or go on a family vacation.

San Antonio Cash-out Refinancing Rules

Texas is a state known for strict home equity laws. The following are Texas state-specific cash-out rules:

• – Maximum 80% LTV = the new loan amount must not exceed 80% of the property’s appraised value;

• – 2% Limited Closing Cost = all the fees a lender can charge must not exceed 2% of the loan amount. It only applies to the lender’s fees, such as origination, processing, and underwriting. However, third-party fees are not included, such as appraisal fees, title insurance, etc.;

• – All Existing Liens Must Be Paid Off = any liens associated with the subject property must be paid at closing. If you have a first and second mortgage or mechanic’s lien, they will be paid at closing before the title company disburses the funds;

• – Waiting Period = You can only avail of the Texas cash-out after having your property for at least six months. You cannot get another cash-out until at least twelve months have passed since your last cash-out refi.

At a minimum, all Texas cash-out loans require a credit score of 620 and a debt-to-income (DTI) back-end ratio of no more than 43%. 

Apply for Cash-out Refinancing in San Antonio

Get better terms or access the equity of your property with a cash-out refinance today. Talk to our Mortgage Originators to learn more about the Texas section (a)(6) home equity refinancing program and whether it is the right solution for you. Get in touch now by calling (210) 634-1225.