Texas Cash Out Refinance – FHA and Conventional Rules
There are some unique guidelines related to cash out refinancing in Texas. While the cash out rules may be slightly more strict in Texas, residents still may apply for some of the very best cash out refinance programs available.
Why Choose us for Your Cash Out Refinance?
- Low Interest Rates – We offer highly competitive interest rates on cash out refinance loans, which results in lower monthly payments.
- Highest LTV Ratios – Our mortgage programs offer the highest loan-to-value ratios, which means you can take the highest amount of cash out.
- Fast Processing – Need to close your loan quick so you can access your cash as soon as possible? If you need rush processing, we may be able to close your cash out refinance in as little as one week. When you speak with your loan specialist, let them know if you need a rush or “priority processing”.
- Program Options – Compare your options to see what program will offer you the best loan, such as the lowest rate and monthly mortgage payment. Our cash out refinance programs in Texas includes the best FHA and conventional loan options.
Would you like to see what loan terms you may qualify for if you cash out refinance? We provide no obligation mortgage quotes and can help you compare your options. We encourage you to compare our rates and loan terms to any other mortgage lender in Texas!
Want to learn more before speaking with a representative or applying?
Texas Cash Out Refinance Guidelines / Requirements
In order to qualify for a cash out refinance in Texas, you must meet certain requirements. These relate to you as a borrower, such as credit and income, as well as your property. The following rules apply to both FHA and conventional. These guidelines are specific to our loans, you may find other lenders to have different qualification requirements.
- Credit – A minimum credit score of 620 is required. You also must also not have any recent bankruptcies, foreclosures, or late mortgage payments.
- Employment – You must be able to show 2 years of consistent employment, and also be currently employed. You will be required to provide 2 years tax returns as a condition of your new loan.
- Debt-to-Income – Your new mortgage payment can not be higher than 29% of your monthly income. Additionally, your total monthly debts, including the new mortgage payment and all credit reported debts, such as auto loans, credit cards, and students loans must not exceed 43% of your income. There are occasional exceptions made to this rule if you have satisfactory “compensating factors” (such as higher credit, long employment history, savings, etc.).
The above rules are for FHA and conventional. There are some differing guidelines for these two loan types, such as the highest LTV ratios, mortgage insurance, and other specific requirements. You can read about both below.
FHA Cash Out Refinance –
What makes FHA loans an attractive option for residents of Texas? FHA cash out loans are popular for the 85% LTV option than. FHA allows 85% LTV, whereas conventional loans are often capped at 80% (higher LTVs may be available for some applicants). FHA refinance loans are easier to qualify for with much less strict guidelines.
- Highest LTV – The highest LTV allowed for a FHA loan is 85%. Years ago, the FHA allowed up to 95%, but all lenders are required to limit the LTV to 85% (this is current as of 2018).
- Mortgage Insurance – All FHA loans require mortgage insurance regardless of the loan-to-value ratio. Therefore, you must pay applicable FHA mortgage insurance whether your LTV is lesser or greater than 80%.
- Property Guidelines – FHA loans have more property restrictions than conventional loans, including what are known as “minimum property standards”. These standards address areas of safety and security. The home must not show any major defects that could cause an unhealthy or unsafe living condition. The value must also be supported in the appraisal.
Want to learn more about FHA cash out refinancing? You may do so on this page here, which you can also calculate how much you may be able to cash out refinance based on expected property value.
Conventional Cash Out Refinance –
Conventional cash out refinance loans usually will provide the lowest interest rates for those with good or excellent credit. Another considerable benefit of conventional loans is that if you do not exceed 80% of your LTV than you do not have to pay any mortgage insurance.
- Highest LTV – The absolute highest LTV on conventional cash out mortgages is 80%.
- Mortgage Insurance – There is no private mortgage insurance (PMI) required, since LTVs will not exceed 80%.
- Property Guidelines – The property condition requirements for conventional loans are less strict than FHA rules. The appraisal must show supporting evidence for the valuation, and not major property concerns such as safety issues.
How do you know which loan is best for you? Request a free consultation and we can pre-approved you for both loans and you can see which is more suitable for you.
Frequently Asked Questions –
Do you offer VA cash out refinancing in Texas?
Unfortunately, we do not offer this program anymore. We are not aware of any lenders who still do. If you are a veteran, you can still do a cash out refinance in Texas, but only with a FHA or conventional loan.
How fast can you close on our loan?
Our goal is to close your loan in 10 days or less. If you need a rush, just let your loan representative know, and we will do our best to accommodate and close your loan quickly.
Are your cash out loans available in the entire state or just select areas?
Our cash out mortgages are available throughout the entire state of Texas, including such major metropolitan areas as: Arlington, Austin, Corpus Christi, Dallas, El Paso, Fort Worth, Garland Houston, Irving, Laredo, Lubbock, Plano, San Antonio, and Waco. This is just to name a few.