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Put your Home Equity to Work for You


You have several options to leverage the equity in your home.  Whether for home improvements, college costs, or for any other reasons... Home Equity Loans put the cash in your hands and then you decide what to do with it.

HELoan

Home Equity 2nd Loan (HELoan) – This is a fixed loan with a fixed monthly pay back.   Lenders typically limit these to no longer than a 15 year payout.  The fixed rates are very attractive but a bit higher than a typical home loan.

Both the HELoan and HELOC can be setup with almost zero closing costs.   Both options simply piggy- back on top of your existing home loan.

HELOC

Home Equity Line of Credit (HELOC) – This option works like a credit card or any other line of credit.  Once you are approved and the HELOC is setup, you can draw against it or let it sit untouched until needed.  You can pay back draws, and later request new draws without having to go through another approval process.  Payback periods and interest rates are determined at the time you make a draw and typically you have more than one payback option.  Very large HELOC draws may offer fixed interest rate options but typically you pay an adjustable interest rate that can go up or down with the overall rate markets.

Cash-Out Refinance

Another option is to take your existing loan(s) against your home refinance at low current market rates, and add cash out.  This option will have higher closing costs than a HELoan or HELOC, including the typical title insurance and closing fees.  This option is more attractive if you are getting rid of a higher interest rate current loan.  Plus your equity cash is added on at the same low fixed rate, with pay back periods up to 30 years.  

Home Equity Limitations

Home equity loans secured by your homestead have several limitations set by Texas law.  This Notice Concerning Extensions of Credit in Texas lays out the details, but the big three are:

Only one home equity at a time.  Can’t do a cash-out refinance, HELoan or HELOC now, and then come back later to add another home equity on top of it.  The existing equity loan must be paid off and rolled into any new equity loan request. 

12 month waiting period.  If you close on an equity loan today, you must wait 12 months to close on another equity loan.  (Need more cash out? You have to wait 12 months to get it.)

80% Loan-toValue Limit – the combined total balances of a new equity loan request and any existing home loans, cannot exceed 80% of the current “as is” market value of the house (market value before any improvements). 

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TEXAS CONSUMER NOTICE
CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A MORTGAGE COMPANY OR A LICENSED MORTGAGE RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550.  THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT-OF-POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED MORTGAGE COMPANY RESIDENTIAL MORTGAGE LOAN ORGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.

                                                                    www.sml.texas.gov/ConsumerInformation/tdsml_recovery_fund_claims.html

Copyright © 2015-2019   |  Paul Enos, Residential Mortgage Loan Originator, NMLS # 350086
First American Mortgage, Company NMLS # 312233, www.famctx.com
4926 Spicewood Springs Road #100, Austin, TX 78759