Refinance · Texas
Texas cash-out refinance, minus the legalese.
Texas protects homesteads more than almost any state. Here's what Section 50(a)(6) means for you, and what to check on a cash-out Loan Estimate.
What is a Texas cash-out refinance?
A Texas cash-out refinance is a new loan on your homestead that pays off what you owe and gives you cash. In Texas it must follow Article XVI, Section 50(a)(6) of the state constitution, which is why lenders call it a 50(a)(6) or Texas home equity loan. The rules protect homeowners and apply to every loan type.
Source: Texas Constitution, Article XVI, §50.
The lien limit
Texas limits how much of your homestead's fair market value can be borrowed against, counting every loan on the home together. That includes the new loan and any second lien. Your cash out is what's left after paying existing liens and closing costs, up to that limit. Loan programs can be stricter than the state limit, never looser.
The exact limit is in the Texas Constitution, Article XVI, Section 50(a)(6). I will check any cash-out Loan Estimate against it for you.
The 12-day wait
A Texas cash-out loan can't close before the 12th day after the later of your application or the date you receive the Notice Concerning Extensions of Credit. You also get your final itemized fees at least one business day before closing. Plan for the appraisal and underwriting too, so real timelines run longer.
The fee cap and other rules
Texas caps most fees to originate, evaluate, record, and insure the loan at a small share of the original loan amount. Interest, bona fide discount points, and certain third-party items like the appraisal and survey are excluded. You also generally can't close a new 50(a)(6) loan within a year of the last one.
- Closes only at a lender, attorney, or title company office.
- Each owner and each owner's spouse must consent.
- Three-day right to cancel after closing.
- No personal liability except for actual fraud; foreclosure only by court order.
Is a cash-out refinance worth it?
It depends on what the cash is for and what it costs you. A cash-out replaces your whole mortgage, so compare the new payment and total costs to alternatives. If your current rate is low, keeping it may matter. Send me any cash-out Loan Estimate and I'll check it against the lien limit and fee rules.
Read the full guide: Texas cash-out refinance rules, explained.
This page is general education, not legal advice. For legal questions about your homestead, talk to a Texas attorney. For illustration only. Not a commitment to lend, a Loan Estimate, or an offer of credit. Your actual figures depend on your full application, credit approval, property, and the loan program. John Stafford NMLS #2470539 | GoRascalJohn powered by GoRascal Inc. NMLS #2072896. Equal Housing Opportunity.
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Common questions
How much cash can I take out in Texas?
Texas limits the total of all liens on your homestead to a share of its fair market value. Your cash out is what's left under that limit after paying off existing liens and closing costs.
How long does a Texas cash-out refinance take?
It can't close sooner than 12 days after the later of your application or the 12-day notice. Most take longer because of the appraisal and underwriting.
Do the 50(a)(6) rules apply to FHA and VA cash-out loans?
On a Texas homestead, a cash-out loan has to meet Section 50(a)(6) no matter the loan type.
Does my spouse have to sign?
Yes. Each owner and each owner's spouse must consent to the lien, even if the spouse isn't on the loan.
Do these rules apply to rental property?
No. Section 50(a)(6) covers homesteads. Investment property follows different rules; investors can ask about DSCR cash-out.
Can I refinance out of a Texas home equity loan later?
Yes, either into another 50(a)(6) loan after a year, or, under Section 50(f)(2), into a regular loan if conditions are met, including no new cash and a written notice 12 days before closing.
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