Good Morning!
If you are thinking about getting cash out of your home – I want you to know your options.
We have some complicated cash out laws in the State of Texas. So, here’s what you need to know…
There are three ways to get cash out of your home:
1) Sell it.
2) Traditional Home Equity loan.
3) HELOC (Home Equity Line of Credit)
When most people get cash out of their homes they use the Traditional Home Equity loan. The benefits? Low rates. 30, 20, 15 yr fixed terms. In Texas we can only get to get up to 80% of the appraised value of our homes (Texas law).
The only way you can get that other 20% cash – is to sell your home.
The laws on Texas Cash Out loan also don’t allow for the closing costs to exceed 3% of the loan amount. …this is the reason lenders don’t want to do a low loan amount cash out loans in Texas. …they can’t make money on them. You can still get a Texas Cash Out loan down to a 620 credit score, but if your score is below 680 you will get some pretty severe Fannie rate penalties.
A HELOC is a line of credit you get on your home. If you get a 20K HELOC – you don’t have to take 20k at closing. You can take it when you want it. Most HELOC’s are interest only ARMS. You need pretty good credit to get a HELOC.
Thanks for reading – and have a great day!
Brett
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