Texas Section 50a6 Loans:

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DonB

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Post Posted: Tue Jul 03, 2007 11:28 am    Post subject: Texas Section 50a6 Loans:
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OK - help me out here. I have a pay-option ARM 1st lien and a HELOC loan from a bank. Can I do a refinance cash-out fixed rate loan to combine the two loans I have now?
Icon Mini Profile miller_st
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Post Posted: Tue Jul 03, 2007 11:51 am    Post subject:
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For a cash out refinance in Texas as per the law which is known as A6 law a cash out refinance cannot be more than 80% ltv. So you need to check if the combined value of both these loans is exceeding 80% ltv or not.

You can read more about this A6 law from here: http://www.mortgagefit.com/texas/a6loan-law.html

Miller
DonB

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Post Posted: Tue Jul 03, 2007 12:13 pm    Post subject: Texas Section 50a6 Loans
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With closing costs, refinancing both loans come to LTV of 71%. Both loans have been in place over 12 months.
spalenka

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Post Posted: Tue Jul 03, 2007 1:00 pm    Post subject:
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Quote:
OK - help me out here. I have a pay-option ARM 1st lien and a HELOC loan from a bank. Can I do a refinance cash-out fixed rate loan to combine the two loans I have now?


If cltv is coming to 71% (lower than what is required - 80%) then there should not be any problem with able to refinance both loans into one fixed rate one.
Icon Mini Profile larry





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Post Posted: Tue Jul 03, 2007 10:21 pm    Post subject: RE
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Hi DonBi,

According to A6 law in Texas, a cash out refinance cannot be done if the total value of the loan to be provided is greater than 80% of the property value. So you need to consult with a lender and find out the value of the loan when combined together. If it is not exceeding 80% of the value, then you can very well qualify for the refinance. But you should remember that it cannot be refinance within first one year.
Icon Mini Profile Samantha
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Post Posted: Thu Jul 05, 2007 10:48 am    Post subject: RE: refinancing both option ARM and Heloc
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Hi Don,

It's a good decision to refinance both the pay-option ARM and Heloc. This is because the option ARM brings about what is known as negative amortization due to which you owe more than the monthly interest you pay. But just keep in mind that you can refinance only up to 80% of the home value.

Hope this helps...

God bless you.

Samantha

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