HELOAN in Texas. Your Equity. Fixed Rate. Lump Sum.
A Home Equity Loan (HELOAN) lets you access your Texas home equity as a fixed-rate lump sum without refinancing your first mortgage. Use it for renovations, debt consolidation, or any major expense.
A HELOAN (Home Equity Loan) is a second mortgage that allows you to borrow a fixed lump sum against the equity you have built in your home. Unlike refinancing your first mortgage, a HELOAN leaves your existing loan untouched and simply adds a second lien. The rate is fixed for the life of the loan, meaning your payment never changes, making it a predictable and stable way to access equity.
Texas has specific constitutional protections for home equity lending that are unique in the country. The total mortgage debt on your primary residence cannot exceed 80% of its appraised value, only one home equity loan is allowed at a time, and there is a mandatory 12-day waiting period between application and closing. These rules are consumer protections. Kris is well-versed in Texas home equity law and can ensure your transaction complies with all state requirements while maximizing your available equity.
Who Qualifies?
Own a primary residence in Texas with sufficient equity
Combined loan-to-value (CLTV) at or below 80%
Credit score of 620 or higher (680+ for best rates)
Stable income to support both existing mortgage and HELOAN payment
No existing home equity loan on the same property (Texas allows one at a time)
Property must be your primary residence in Texas
Pros and Cons
Advantages
Fixed rate and fixed payment for the life of the loan
Access equity without refinancing your first mortgage
Preserve your existing low first mortgage rate
Lump sum disbursement ideal for defined projects
Interest may be tax deductible when used for home improvements (consult tax advisor)
No surprise rate increases unlike a variable-rate HELOC
Things to Consider
Texas constitutional limit of 80% CLTV restricts maximum amount
Only one home equity loan allowed at a time
Mandatory 12-day waiting period before closing
Primary residence only in Texas
Adds a second lien to your property
Cannot be opened and closed quickly like a HELOC
Frequently Asked Questions
A HELOAN provides a fixed lump sum at a fixed interest rate with consistent monthly payments for the full term, typically 10-20 years. A HELOC is a revolving line of credit with a variable rate and draw period. A HELOAN is better when you know the exact amount you need and want payment certainty. A HELOC is better for ongoing or uncertain expenses.
Texas limits total mortgage debt on a primary residence to 80% of the appraised value. To calculate your maximum: multiply your home value by 80%, then subtract your existing mortgage balance. On a $500,000 home with a $250,000 first mortgage, the maximum HELOAN is $150,000 ($400,000 minus $250,000).
Yes. Texas has strict constitutional rules. Total debt cannot exceed 80% of appraised value, only one home equity loan is allowed at a time, there is a mandatory 12-day waiting period between receiving disclosures and closing, you can only do one home equity loan per 12-month period, and the home equity loan must be closed at a title company or attorney office. Kris manages all of these requirements for you.
Common uses include home renovations and improvements, debt consolidation, major medical expenses, education costs, business investment, and other large purchases. Texas does not restrict the use of home equity loan proceeds, but the interest tax deduction generally requires the funds to be used for home improvements.
Texas requires a mandatory 12-day waiting period between providing required disclosures and closing. Most HELOAN transactions close in 3-4 weeks total. The process involves an appraisal of your home, title review, and underwriting. Kris manages the timeline to ensure compliance and efficient closing.
