Posted on: 14th Mar, 2007 11:37pm
In the state of Texas, there is a law pertaining to cash-out refinance. This law is known as Texas cash out 50(a)(6). This is more popularly known as Texas a6 law. Under Texas refinance laws, you are required to take out a cash out loan of 80% of the appraised value of the property.
If you are a US citizen, a permanent resident alien or a non-permanent resident alien, then you may be eligible for this loan. However, if you are a foreign national or a borrower with diplomatic immunity, then you will not be eligible for this loan.
Eligibility criteria to get approved for Texas a6 cash out refinance are listed below.
Single family residences, warrantable attached/detached condos and PUDs classified as homestead under Texas a6 laws. Non-warrantable condos, non-warrantable Planned Unit Developments (PUDs), manufactured home etc. are however not eligible. Anyways, the minimum property area should be 600 sq ft. Property must be classified as a homestead under Texas refinance laws.
The minimum credit score required for this is 620. In addition to this, the maximum permissible DTI (debt to income) ratio is 45%.
You should have established a good credit score after you have filed bankruptcy and/or foreclosure. If your property has been foreclosed, then the waiting period to get approved for this loan is 7 years.
A continuous employment of 2 years is required. For self-employed persons, proper documentation of income is required.
Assets that are used to close the transaction must be disclosed. Funds that you use in the transaction must come from a verified source.
While taking out this loan, you should follow the Texas a6 cash out refinance rules properly. It is advised that you should get the help from a mortgage attorney for this.
If you are a US citizen, a permanent resident alien or a non-permanent resident alien, then you may be eligible for this loan. However, if you are a foreign national or a borrower with diplomatic immunity, then you will not be eligible for this loan.
Eligibility criteria for Texas a6 cash out refinance
Eligibility criteria to get approved for Texas a6 cash out refinance are listed below.
Properties
Single family residences, warrantable attached/detached condos and PUDs classified as homestead under Texas a6 laws. Non-warrantable condos, non-warrantable Planned Unit Developments (PUDs), manufactured home etc. are however not eligible. Anyways, the minimum property area should be 600 sq ft. Property must be classified as a homestead under Texas refinance laws.
Credit score and DTI
The minimum credit score required for this is 620. In addition to this, the maximum permissible DTI (debt to income) ratio is 45%.
Credit history
You should have established a good credit score after you have filed bankruptcy and/or foreclosure. If your property has been foreclosed, then the waiting period to get approved for this loan is 7 years.
Employment
A continuous employment of 2 years is required. For self-employed persons, proper documentation of income is required.
Assets
Assets that are used to close the transaction must be disclosed. Funds that you use in the transaction must come from a verified source.
While taking out this loan, you should follow the Texas a6 cash out refinance rules properly. It is advised that you should get the help from a mortgage attorney for this.
Hi Hector!
Welcome to forums!
You can refinance both the loans into one and take advantage of the low rates. However, you should have equity in your property. Apart from that, you should meet all the other required criteria of the lender in order to get the refinance.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
You can refinance both the loans into one and take advantage of the low rates. However, you should have equity in your property. Apart from that, you should meet all the other required criteria of the lender in order to get the refinance.
Feel free to ask if you've further queries.
Sussane
Can I do a Texas cashout on a rental home?
NavyFed turned me down after the inspection! Saying tx rules did not allow cashout refi on rental property.
TX has an A-6 law which limits the amount for a cashout refinance. Typically, lenders limit the loan to value amount to 70-75% If you have 25% or more equity in your home feel free to give us a call. We lend in TX.
I am hearing conflicting information from shopping to refinance our mortgage loan. We converted our construction loan to a mortgage loan and shortly after decided to take out some equity and lower the mortgage rate in 2003. Now I am being told by some lenders that we will always have to pay an additional .25% on any future refinances since that once we took out the cash on that refi 10 years ago. Other lenders state that it is only charged when cash comes out and it is not applicable. What is the correct answer, the way the law states it?
please reply as soon as possible as i want to lock in a very low rate.
please reply as soon as possible as i want to lock in a very low rate.
I don't think that will be true. I think it will be only charged when cash comes out!!
i'm from brownsville, texas and want to accomplish to things: 1)get cash to purchase a residential lot 2) refinance my current mortgage to lower my interest rate. i have have excellent fico scores of 770 and my debt on the house is only 35k and it's valued at 85k. i currently have an fha loan and wanted to know who i can go with to get an fha cash-out refi with in texas or how to best accomplish the my two goals above?
Hi preluder!
Welcome to forums!
A similar query has been replied to in the given page: http://www.mortgagefit.com/Refinancing-and-Second-mortgage/Need-advice-please-on-refinance.html . Take a look at it and I hope it will help you.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
A similar query has been replied to in the given page: http://www.mortgagefit.com/Refinancing-and-Second-mortgage/Need-advice-please-on-refinance.html . Take a look at it and I hope it will help you.
Feel free to ask if you've further queries.
Sussane
I refinanced my house in 2009 and received cash out of about $6,000. I am now refinancing for a better rate and shorting my loan to 10 years.What I want to know is there anywhere in this law that states that the lender can charge me more on the interest on this loan? I know they don't have to consider the appraisal on the loan which is $180,000 and I only owe $79,000. Does anyone know if this true?
Hi Adam!
Welcome to the forums!
I don't think that the lender can charge you more on the interest on this loan.
Feel free to ask if you've further queries.
Sussane
Welcome to the forums!
I don't think that the lender can charge you more on the interest on this loan.
Feel free to ask if you've further queries.
Sussane
Adam,
Since your loan amount is so small they may be charging more interest to reduce your closing cost so they stay under the 3% limit.
example ( by no way today s rates or a rate quote): your par rate is 25% lender can offer you 25.5 lender makes more on rate(not paid to loan officer see Frank Dodd act) to reduce closing cost and stay under the 3% cap on fees.
if this is not what you are asking please clarify.
Since your loan amount is so small they may be charging more interest to reduce your closing cost so they stay under the 3% limit.
example ( by no way today s rates or a rate quote): your par rate is 25% lender can offer you 25.5 lender makes more on rate(not paid to loan officer see Frank Dodd act) to reduce closing cost and stay under the 3% cap on fees.
if this is not what you are asking please clarify.
I am a co-tenant with my mom that is a alzheimers victim. She granted me full durable statutory POA back in 1997 when we were aware she had the disease. Can I use the POA to close on a cash out refi in Texas.
Hi Rod,
If you have the POA, then you can close the deal. However, it will be better if you can take the opinion of a real estate attorney before going forward with the deal.
If you have the POA, then you can close the deal. However, it will be better if you can take the opinion of a real estate attorney before going forward with the deal.
i want to refinance my current home mortgage balance of $80k this summer to a 15 year fixed. i did texas a6 in 2006. current home appraised value is $140k. fico score is 730 with dti ratio of 39. i know it would still be underwritten as cash-out even as i'm not getting any cash this time. my bank wants to do a 15-year fixed at 3.5% apr. what other option do i have?
Hi MC,
I personally think that a 15-year fixed at 3.5% APR will be a good option. As far as other options are concerned, you should get in touch with the lender for that.
Thanks
I personally think that a 15-year fixed at 3.5% APR will be a good option. As far as other options are concerned, you should get in touch with the lender for that.
Thanks