Texas HELOC rules

Texas has its own rules for borrowing against a home. This guide covers the main ones in plain words.

How much can you borrow in Texas?

In Texas, all the loans on your home added together cannot go above 80 percent of its appraised value. That includes your first mortgage and the new line.

Here is a simple example. Say your home is worth $500,000. Eighty percent is $400,000. If you still owe $300,000 on your mortgage, the most the new line could be is about $100,000.

In many other states, lenders allow a higher combined limit. Texas is lower.

The waiting period before closing

Texas law puts a waiting period between your application and closing a home equity loan or line. People often search for the "12 day rule" for this reason.

The dates for your own loan come to you by text and email. Plan for the wait if you need the money by a set day.

A recent Texas home equity loan can block a new one

If you already took out a Texas home equity loan or line on the same home, lenders usually want at least 12 months to pass first. You will be asked about this when you answer our questions.

Which homes work

• The home usually needs to be your main home.
• Investment properties and second homes are not eligible in Texas.
• A home that is listed for sale usually cannot be used.

What to do next

These Texas rules apply to your own home as well. Start by answering a few questions online; your pre-approval decision comes by text and email. A soft credit check does not affect your credit score.

Questions people ask

Why is the Texas limit lower than in other states?

The 80 percent cap is in the Texas Constitution. Lenders cannot go above it, whatever your credit or income.

Can I open a line on a rental in Texas?

No. Texas home equity rules cover your main home only.

I had a Texas home equity loan last year. Can I open a line now?

Usually not until 12 months have passed since the last one. Tell us the date on the form and we check it.