Texas Refinance Laws - How They Differ From Other States
If you live in Texas and are considering refinancing your mortgage for any reason, you may very well be looking for some updated and relevant information with regard to the Texas refinance laws. There is more or less one conclusion that you're going to come to after all the reading and research, and that is that Texas refinance laws have just a few key differences from other states.
For the most part, the laws associated with refinancing in Texas really boil down to common sense, and are there to protect both the bank, and the homeowner (you) from being exploited, or taken advantage of in some way.
The one thing that is rock solid in the Texas refinance laws is the Loan to value that is allowed, which is 80%. Basically what this means is that in order to pull any cash out at the refinance settlement, the total loan, both the principal loan and the refinance cannot exceed 80% of the home's appraised value.
What this does is stops unscrupulous homeowners or ones that might be in over their head, from pulling a pile of cash out of a house that they either can't, or don't have any intention of paying. In the past, there weren't any such restrictions, and because of this, many banks ended up with hoards of bad loans on their books. This essentially causes the risk factors, and interest rates, to increase for everyone out there applying for a loan.
There are other things that you should keep in mind though, such as closing costs, terms, and the actual interest rate of the refinance that you are applying for. Closing costs can vary from lender to lender, as can the terms and interest rates that they offer you. So, shopping around for a little bit to make sure that you're getting the best deal is something that any smart consumer will do.
The best way to ensure that you are within the Texas refinance laws is to have an actual real estate attorney review all paperwork that you must sign either prior to closing, or to have them come with you to the actual closing. However, in most cases, the brokers that set the loans up for you, in many cases are more than experienced enough to make sure that your loan is "legal" and above-board.
As you can see, the Texas refinance laws are a bit different than other states, but the laws were created with your best interests at heart. As with anything that is contract based, it's always best to consult with a good real estate attorney or your mortgage loan officer if you have specific concerns.
For the most part, the laws associated with refinancing in Texas really boil down to common sense, and are there to protect both the bank, and the homeowner (you) from being exploited, or taken advantage of in some way.
The one thing that is rock solid in the Texas refinance laws is the Loan to value that is allowed, which is 80%. Basically what this means is that in order to pull any cash out at the refinance settlement, the total loan, both the principal loan and the refinance cannot exceed 80% of the home's appraised value.
What this does is stops unscrupulous homeowners or ones that might be in over their head, from pulling a pile of cash out of a house that they either can't, or don't have any intention of paying. In the past, there weren't any such restrictions, and because of this, many banks ended up with hoards of bad loans on their books. This essentially causes the risk factors, and interest rates, to increase for everyone out there applying for a loan.
There are other things that you should keep in mind though, such as closing costs, terms, and the actual interest rate of the refinance that you are applying for. Closing costs can vary from lender to lender, as can the terms and interest rates that they offer you. So, shopping around for a little bit to make sure that you're getting the best deal is something that any smart consumer will do.
The best way to ensure that you are within the Texas refinance laws is to have an actual real estate attorney review all paperwork that you must sign either prior to closing, or to have them come with you to the actual closing. However, in most cases, the brokers that set the loans up for you, in many cases are more than experienced enough to make sure that your loan is "legal" and above-board.
As you can see, the Texas refinance laws are a bit different than other states, but the laws were created with your best interests at heart. As with anything that is contract based, it's always best to consult with a good real estate attorney or your mortgage loan officer if you have specific concerns.
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