Texas Cash Out Laws on Refinancing

kirklen · Joined: 23 Jan 2008 Posts: 1 1.41 Dollars($)

I heard there was a law in Texas that says once you refi and do a cash out you can never do a cash out again on that home. Is that true?

larry · Joined: 27 Jun 2007 Posts: 2598 349.39 Dollars($)

Hi kirklen,

Welcome to the forum.

Are you thinking to do Cash out refinance?

I think what you have heard is not right. You can do Cash out refinance even if you have done it once but at least after 12 months. You cannot do it sooner than that.

Feel free to ask if you have any further questions.

Best of luck,
Larry

blue · Posted: Wed Jan 23, 2008 2:19 pm Post subject:

Hi,

Welcome to Mortgagefit discussion board.

As far as I know Larry is right. You can do cash out refinance after 12 months once you have done it. The logic behind it is if you want to refinance you will have to gain equity first. So before a year you can hardly any equity to get a cash out.

Do let me know if you have any other questions.

Thanks
Blue

kpatrick · Posted: Wed Jan 23, 2008 3:32 pm Post subject:

Larry is correct...12 months between c/o refis in Texas.

lisascherzer · Joined: 04 Jan 2008 Posts: 575 66.11 Dollars($)

Also something to keep in mind is that once a cash out, always a cash out in Texas. So even though you may just refinance the first mortgage without literally taking cash or paying off bills, your lender will need to consider it a cash out refinance. Remember to let them know when you apply for a mortgage loan.

Guest 0.10 Dollars($)

What is the maximum a bank can loan to refinance a home with cash out in Texas?

ckalvesmaki · Posted: Wed Feb 06, 2008 5:22 am Post subject:

80% of the value of the home.....assuming primary residence.

Guest 0.10 Dollars($)

Also, you can do a regular refi in Texas to pay out a divorce settlement or to refi and include all closing costs and no more than $2000 in cash back. It is a cash-out when more than $2000 is taken out by the borrower.
The amount you can take out is up to 80% of the appraised value of the home. You will need a current appraisal for this value to be determined. The appraiser will have to be one approved by the lender.
If you have done a previous refinance and taken cash-out, if you go to refinance again in the future, it will be a cash-out refi again. Once a cash-out always a cash-out in Texas.
Yes, you can refi after 12 months but you have to make sure that you do not have a pre-payment penalty. There are a lot of lenders out there that had 3 year pre-payment penalties on cash-out refinances and several regular loans in Texas.
You need to read the fine print on your current loan.
Also, now most lenders will not do a cash-out unless the credit is over a certain number......some are at 660 for a cash-out minimum.
Things to keep in mind!!
You can contact me if you have any further questions as I am a mortgage broker in the Dallas area.
This advice is generic in nature and each loan has different conditions.
Diane Keen
Keen Group, Inc.
Mortgage Broker
(214) 537-8887

Guest 0.10 Dollars($)

If you are wanting to "cash out" for a divorce settlement, the best way to go with for your spouse/ex=spouse to file an Owelty Deed. This will place a lien on the property and when you refinance, the lien holder has to be paid off and it's not considered a cashout loan. Therefore you do not have to follow the cashout laws and you you may get a better rate. Cashouts in Texas with a LTV (loan-to-value) equal to or greater than 70% of the appraised value have a lightly higher rate. One problem with having a cashout loanis if you ever want to get a small amount for bills or whatever with a home equity loan, you can't. you can only have one equity loan on the property and as mentioned before, once an equity loan, always an equity loan...something to consider.

Caron · Posted: Tue Mar 11, 2008 10:15 pm Post subject: RE: texas cash out refinance

Hi Diane and John,

Welcome to our forums.

Great advice from your end. Smile

I'm sure it is going to help the poster.

By the way John, why don't you join the community and share your views with others. I hope you'd enjoy participating here and helping people with your knowledge.

Diane, since you're a mortgage broker, feel free to join our community as a lender and enlist your name in our lenders directory. There are a group of lenders who're a part of our community and they have been very helpful in guiding people in need of loan or solutions to mortgage problems.

Best wishes for all the good work that both of you do. Smile

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