Tap up to 80% combined LTV
The Texas constitutional cap is 80% — your existing first mortgage plus the new cash-out cannot exceed 80% of the appraised value. Maximum equity access in a single transaction within Texas rules.
Texas cash-out refinance — Section 50(a)(6) compliant.
Tap your home equity by refinancing into a larger loan. Texas has unique constitutional rules for cash-out — we structure to comply with Section 50(a)(6) so there are no surprises.
- Up to 80% combined LTV (Texas constitutional cap)
- 12-day cooling-off period
- Closing cost cap: 2% of loan
A new, larger first mortgage that pays off the old one and gives you the difference in cash.
A cash-out refinance pays off your existing mortgage and gives you the difference in cash, secured by a new (larger) mortgage on the property. In Texas, cash-out refis on primary residences are governed by Article XVI Section 50(a)(6) of the Texas Constitution — adds protections that don't exist in other states (80% combined LTV cap, 12-day cooling-off, 2% closing-cost cap, only one home equity loan at a time, spousal consent, restricted closing locations). Until 1997 Texas didn't allow consumer cash-out lending at all; when the state finally permitted it, the rules were written into the constitution rather than into ordinary statute. That means the protections cannot be eroded by legislation. Lenders who don't live in Texas mortgage compliance every day frequently get this wrong — and a non-compliant Texas cash-out lien can be unenforceable.
How a Texas cash-out refinance closes.
- 01
Determine current equity and maximum cash-out
Appraised value times 80% minus current loan balance equals the maximum cash-out under the Texas constitutional cap. We model the exact dollar number on every file before quoting terms.
- 02
Apply with full income and asset documentation
Texas cash-outs are full-doc: income (W-2, pay stubs, tax returns), assets, debts, current first-mortgage statement. The same disclosures apply as to any consumer mortgage, plus the 50(a)(6)-specific notices.
- 03
12-day cooling-off period (Texas constitutional requirement)
Once you receive the required Section 50(a)(6) notice and submit a written application, Texas mandates at least 12 calendar days before the loan can close. The period is non-waivable — closing earlier creates an unenforceable lien. We schedule the file around this from day one.
- 04
Underwriting and appraisal
Lender clears credit, income, value, and title conditions. Combined LTV is verified against the 80% cap. Closing-cost cap (2% of loan amount) is verified against the constitutional limit. Spousal consent is documented if the borrower is married.
- 05
3-day right of rescission disclosure
For a cash-out refinance on a primary residence, federal Truth-in-Lending rules give you a 3-business-day right of rescission after closing. The new loan does not fund and the lien does not become enforceable until the rescission period ends.
- 06
Close at a permitted location
Section 50(a)(6) requires closing to happen at the lender's office, an attorney's office, or a title company — not in your home or another informal location. Both spouses must consent and sign if the borrower is married. After the rescission period, funds disburse.
Built for Texas homeowners tapping equity the right way.
Texas Section 50(a)(6) is the single most-misunderstood area of consumer mortgage law in the state. Out-of-state lenders quote terms that violate the 80% combined LTV cap, miscalculate the 2% closing-cost cap, schedule closings that miss the 12-day cooling-off period, or skip the spousal consent requirement — and the consequence isn't just a fine, it's a lien that may not be enforceable. We close Texas cash-out refis the way Texas wrote them: 80% combined LTV cap, 2% closing-cost cap, 12-day cooling-off, spousal consent, permitted closing location, and the one-equity-loan-at-a-time rule. No surprises, no compliance gaps.
A cash-out refinance is the right tool when:
- You are funding a major home improvement or remodel project
- You are consolidating high-interest credit card or other unsecured debt at a lower secured rate
- You are paying college tuition or other education expenses
- You are covering an emergency or significant family expense
- You are using equity from your primary residence to fund an investment property purchase
Why a Texas-compliant cash-out refinance matters.
Single payment vs HELOC variable rate
A cash-out refinance consolidates your existing mortgage and your equity draw into one fixed loan with one payment. Compared to a HELOC, no variable-rate exposure and no draw / repayment period mechanics to track.
Fixed-rate payment certainty
Most cash-out refis are fixed-rate, locking your principal and interest payment for the life of the loan — useful for budgeting around debt consolidation or a long renovation payback.
Texas constitutional protections built in
Every disclosure, every closing location, every signature, the cooling-off period, the closing-cost cap — all structured to satisfy Section 50(a)(6) before the file ever moves to underwriting.
Tax-deductible interest if used for home improvement
Under current federal tax law, interest on cash-out proceeds used to substantially improve the same home that secures the loan may be tax-deductible. Equity used for debt consolidation or other purposes is generally not deductible — consult your CPA.
Up to $1M+ for jumbo cash-outs
Cash-out refis are available across conforming and jumbo loan amounts — single-loan structures into the seven figures for borrowers with the equity and qualifying profile to support them.
80%
Texas combined LTV cap
Texas cash-out refinance questions, answered.
What is Section 50(a)(6)?
Section 50(a)(6) is the part of Article XVI of the Texas Constitution that authorizes — and tightly regulates — home equity lending in Texas, including cash-out refinances on a primary residence. It sets the 80% combined LTV cap, the 12-day cooling-off period, the 2% closing-cost cap, the requirement that closings happen at a lender, attorney, or title office, the rule that you can have only one home equity loan on the property at a time, and the spousal consent requirement. Because these rules sit in the constitution rather than in ordinary statute, they cannot be changed by routine legislation.
Why is Texas different from other states for cash-out refinances?
Until 1997, Texas didn't allow consumer home equity lending at all. When the state finally authorized it, the legislature put the borrower protections directly into the state constitution rather than into the property code. That makes Texas the only state where cash-out refinance protections are constitutional rather than statutory. Lenders who don't live in Texas mortgage compliance every day frequently structure files that violate the constitutional rules, which can render the lien unenforceable.
Can I cash out more than 80% of my home value?
Not on a primary residence in Texas. The 80% combined LTV cap is constitutional — your existing first mortgage plus the new cash-out cannot exceed 80% of the appraised value. No lender, regardless of credit profile, can offer a 90% LTV cash-out refinance on a Texas primary residence. Investment properties and second homes follow different rules outside Section 50(a)(6).
What is the 12-day cooling-off period?
After you receive the required Section 50(a)(6) notice and submit a written application, Texas requires at least 12 calendar days to elapse before the loan can close. The period exists so borrowers have time to review terms and reconsider. It cannot be waived, even at the borrower's request — closing earlier than 12 days creates an unenforceable lien. We schedule the entire file around this requirement from day one.
Are closing costs capped on a Texas cash-out refinance?
Yes. Section 50(a)(6) caps total fees and closing costs at 2% of the loan amount. A few items are excluded from that cap (most notably the appraisal fee, the survey fee, and the title insurance premium itself), but origination, processing, underwriting, document preparation, and most third-party charges all count against the 2%. We pre-calculate the cap and structure the fee sheet to comply on every file.
Can I use cash-out proceeds for any purpose?
Yes — once funded, the proceeds can be used for any legal purpose: home improvement, debt consolidation, tuition, an investment property purchase, a family expense. The Texas constitutional restrictions are on the loan structure (LTV cap, closing-cost cap, cooling-off period, one-at-a-time rule, spousal consent), not on how you use the money after closing.
Is the interest tax-deductible?
Under current federal tax law, interest on cash-out proceeds is generally deductible only when the proceeds are used to buy, build, or substantially improve the same home that secures the loan. Equity used for debt consolidation, tuition, or other purposes is generally not deductible. This is federal tax law, not Texas-specific. Always confirm with your CPA — your individual situation may change the answer.
Can I have a HELOC AND a cash-out refinance at the same time?
No. The Texas Constitution allows only one Section 50(a)(6) home equity loan on a property at a time, and a cash-out refinance counts as that one. If you already have a HELOC or HELOAN and want a cash-out refinance, the existing equity loan has to be paid off as part of the new closing. Conversely, taking a cash-out forecloses the option of opening a HELOC on the same property until the cash-out is paid off.
Texas cash-out refinance — let's structure it right.
Texas cash-out refinance requirements at a glance.
- Texas owner-occupied primary residence (investment and second-home cash-out follows different rules)
- 12-day cooling-off / disclosure period mandatory and non-waivable
- Closing costs 2% of loan amount or less (Texas constitutional cap, with limited exclusions for appraisal, survey, and title premium)
- 80% combined LTV maximum (existing first mortgage plus new cash-out)
- Single home equity loan rule — only one cash-out OR HELOC at a time, not both
- 6+ months on current loan typical (some loan types require longer seasoning)
- FICO 620+ typical (best pricing usually starts higher)
- Spouse must consent and sign if married, even if only one spouse is on the loan
- Some agricultural-use property is restricted from cash-out lending under the constitution
- Property must appraise at value
Cash-Out Refi vs HELOC vs HELOAN vs Personal Loan.
| Structure | Rate | Texas-specific notes | Best for | |
|---|---|---|---|---|
| Cash-Out Refinance | New first mortgage replacing the existing one, paid out as a single lump sum | Fixed (typical) | Section 50(a)(6) — 80% combined LTV, 12-day cooling-off, 2% closing-cost cap, counts as your one equity loan | Tapping equity in a single transaction with one consolidated payment |
| HELOC | Revolving line of credit secured by your home | Variable (Prime + margin) | Same Section 50(a)(6) protections apply; one-equity-loan-at-a-time rule still in effect | Flexible draws over a 10-year period |
| HELOAN | Fixed lump-sum second mortgage | Fixed | Same Section 50(a)(6) protections apply; one-equity-loan-at-a-time rule still in effect | Known one-time expense without disturbing your existing first mortgage |
| Personal Loan | Unsecured installment loan | Fixed (typically higher than home-secured options) | No Texas constitutional restrictions — but no home as collateral means materially higher rates | Smaller amounts, faster closing, or borrowers who can't or don't want to lien their home |
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Other ways we close
HELOC
Revolving line of credit secured by your home — also Section 50(a)(6) governed.
Learn moreHome Equity Loan
Fixed lump-sum second mortgage — the canonical Section 50(a)(6) explainer.
Learn moreRate-and-Term Refinance
Refinance for rate or term only — no cash withdrawn, no Section 50(a)(6) constraints.
Learn more