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Texas Home Equity Loan Disclosure and Texas(a)(6) loan

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Moises Rivera Guest	Posted: Wed Jan 19, 2011 1:02 pm    Post subject: Texas Home Equity Loan Disclosure and Texas(a)(6) loan Like 0 Dislike 0 I applied for a Texas Home Equity Loan and was approved until they asked me what I intended to use the fund for. I told them that my current home is too large for one person, 5300 sq ft. I intend to build a smaller home and sell my current home. Construction should take about a year. Now they declined the loan. I asked why, and the response is, and I quote, "It is due to the fact that the investor to whom we would sell the loan says that there is a risk of the borrower not selling his current primary residence before he completes the new primary residence and therefore in their eyes he would have two primary (while he is attempting to sell the current one)." They make reference to 5.07 Refinance Transactions Texas(a)(6) Restrictions- The (a)(6) loan may not be used to acquire the proprty or to finance construction. We want to understand their position but can't. We have read the Texas Home Equity Loan Disclosure and there is nothing that regulates or restricts the use of the funds borrowed. We researched and you can only have one homestead in the State of Texas. To change homesteads I would have to move out of my home, rent it out and own another property which I would declare is my new homestead. And as for the Texas(a)(6) Restrictions, I am unclear as to what they are referring to. We are not acquiring the Property, we own it and we're not financing constuction. We're building a home with my own funds. So, can anyone explain why we can't get this loan?[/i] _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
smithsussane Joined: 18 Sep 2008 Posts: 10439 Location: Alaska 985.83 Dollars($)	Posted: Wed Jan 19, 2011 7:54 pm    Post subject: Like 0 Dislike 0 Hi Moises! Welcome to forums! Well... I won't be able to tell you much about Texas A6 but if you already have a mortgage on one of your properties, the lender won't be ready to give you a loan to buy/build another new property though you have equity or stable financial situation. Lenders and investors are afraid that in today's market you may not be able to sell off the existing home and thus it will be difficult for you to pay off both the loans. Feel free to ask if you've further queries. Sussane

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