Why Texas is different
Texas protects homesteads more strongly than any other state. Borrowing against your home's equity is governed by Article XVI, Section 50(a)(6) of the Texas Constitution.
The main limits
Total loans against your homestead cannot exceed 80% of its value. You may close only one home equity loan in any 12-month period. Certain lender fees are capped at 2% of the loan amount.
There is a 12-day waiting period after you receive the required notice, and a three-day right to cancel after closing.
Where you close
The closing has to take place at the office of the lender, a title company or an attorney. A mobile notary at your kitchen table is not allowed for this type of loan.
Alternatives worth comparing
If your current mortgage has a low rate, a HELOC or home equity loan lets you borrow against equity without replacing it. The same 80% limit applies.
Investment properties and second homes are not homesteads, so these rules do not apply to them.
This article is general education, not financial, tax or legal advice. Guidelines change and vary by lender. Talk with Mike about your own situation.