From the RatesQ team · Sample question

What are the Texas cash-out refi rules? Heard they're different from other states

This educational scenario and its sample explanations are not posts from real users.

I live in Texas and want to do a cash-out refinance. I've heard Texas has special rules around home equity. My home is worth $450k and my current mortgage is $280k. How much can I pull out and what are the Texas-specific restrictions?

Quick Summary

  1. Texas home-equity transactions have state-specific rules and restrictions.
  2. Eligibility, timing and available proceeds depend on the transaction.
  3. Ask the provider to identify the requirements that apply to the proposed loan.

Sample explanations

From the RatesQ team

Texas is unique. Under Section 50(a)(6), you can only borrow up to 80% of your home's appraised value total, including the existing mortgage. So on $450k: 80% = $360k. Your current mortgage is $280k. Max cash-out would be $360k - $280k = $80k minus any fees rolled in. The 12-day waiting period is also real — you sign the application, then must wait 12 calendar days before you can close.

From the RatesQ team

All of that is correct. A few additional Texas-specific points: the loan must be made by a licensed lender, the borrower must receive a disclosure at least 3 business days before closing, and the right of rescission applies (3 days to cancel after closing). Also importantly — once you do a Texas 50(a)(6) cash-out, any future refinance on that property is treated as a home equity loan under Texas law, even if you're not taking any cash out. This matters for future refinancing strategy. Not a dealbreaker, but good to know going in.