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Is there a penalty in Texas for the mortgage company doing this?

livinginnky · Posted: Thu Sep 13, 2007 9:18 am Post subject:

Unless there is a specific state law which I doubt.

However if they mean an extra insurance payment which is called Mortgage insurance or just MI or LPMI then yes every state does that. Any time a loan is greater then 80% Loan to Value the investors will require that you pay for the insurance that protects them in the event the home goes into default. You could also buy this type of insurance to protect yourself.

But I don't know of any specific penalties per se.

miller_st · Joined: 17 Jan 2007 Posts: 918 168.95 Dollars($)

Hi Tracy,

Are you looking at cash out refinance ?

If it is so then there is a law in Texas known as the A6 law according to which a cash out refinance cannot be for more than 80% of the value of the house.

You can read more about this law from the following page: http://www.mortgagefit.com/texas/a6loan-law.html

Miller

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi Tracy,

At present, Texas law allows a borrower to refinance upto 100% of home value. Unless you are doing a cash-out refinance, there is no penalty associated with a refinance.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

No penalty just have to make sure you are borrowing less than 80% of your homes value for a cash out transaction in Texas.

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refinance mortgage over 80% of value