Texas Home Equity Rules: Key Insights for Borrowing Safely

What should first-time borrowers in Texas know about home equity rules? Texas imposes some of the strictest home equity protections in the nation, allowing homeowners to secure loans up to 80% of their home value after a significant constitutional amendment in 1997. Homeowners must navigate a 12-day waiting period before closing on a loan, and they can only hold one home equity loan at a time on their homestead, limited to one loan per year. Additionally, fees for home equity loans are capped at 2%, though some third-party costs may be excluded due to changes made in 2018. These loans are non-recourse, meaning homeowners won’t owe more than the home’s value in case of default, and closings typically occur at the lender’s, title company’s, or attorney’s office.

Understanding Texas home equity rules is crucial for homeowners aiming to tap into their home’s value confidently.

For expert insights on the Atascocita real estate market, connect with Tom Whitaker, REALTOR® at RE/MAX Universal Northeast.