There are several different Texas refinance rules that a homeowner must adhere to before they are allowed the opportunity to secure a mortgage loan for refinancing their property.
Although to some individuals these laws may seem quite frustrating, but they have actually been put in place by the state for the purpose of ensuring that the overall financial condition of the homeowner is protected.
The laws put in place by the Lone Star state, in regards to individuals refinancing mortgage loans, have been considered by many lenders and homeowners alike to be some of the most stringent to be found anywhere. However, the bottom line simply cannot be denied, which is the benefit of protection that every homeowner receives.
Home equity loans, which is more commonly referred to as a cash-out loan by many residents of the state, is one of the most common types of mortgage loans that many homeowners apply for. As you might have guessed, individuals that apply for cash-out loans are certainly not exempt from some specific Texas refinance rules that apply to these loans.
How Much You Can Borrow When Doing a TX Refinance
One of these laws is in regards to the overall amount of money that a homeowner is allowed to borrow. The law states that a person that is applying for a refinance loan, is unable to borrow money that is greater than the amount totaling 80% of the property’s appraised value.
The homeowner applying for this loan is also not allowed to collect the funds of the mortgage-loan until after the passing of a 12-day period, when the final closing will occur. They also are responsible for signing a special agreement in acknowledgment of this rule.
TX Refinance Rules – Consumer Protection
One of the Texas refinance rules that’s sole purpose is to protect the homeowners that choose to secure a refinancing mortgage loan is in regards to the closing fees. This law clearly states that the fees that they are ultimately charged for the entire process cannot exceed an amount that is greater than 35% of the funds the individual intends to borrow.
This is a law that helps a great deal in preventing banks, credit unions and other types of lending firms from charging borrower’s of these loans, an excessive amount of money in fees.
If your plans are to refinance the current mortgage that you have on your property, it is very important to take the time to review the Texas refinance rules about these loans.