This TX rule is unjust. I have been trying and trying hard to find a way to get some cash out via refi but no luck. Tried selling my house to my corp which is not doable…
I am running out of options…I have a plea to all the REI senior baord members, please advise me what to do???
Tell me more about the specifics of this rule.
Are you talking a true refi or a HELOC? I heard about an 80% with a HELOC, but haven’t heard about the refi. Matter of fact, I was told by three different loan brokers that I could get a 90-95% refi. Do tell more.
ICAN is correct if the property in Texas is homesteaded then the cap is 80% LTV with NO exceptions. However if the house is NOO you can go above the 80% rule. The max I have ever done is 90%, but I have heard other LO’s say that they have gotten 95-100%
That clarifies the issue. Thanks!
Here is the issue. I bought a bank owned house in April. This is my REO in TX. I claimed this as homestead to get a better deal from the bank. ANyway, closing was done and I put that house on the market for 2 months…later I decided to live in it so I moved in. Since I have all this equity, 120k to be exact, I decided to do cash out refi and get some of that money out and put it towards the down payment of a franchise. Went to the banker and declined saying that they can do only upto 80% which is no good. I dont what to do. This deal has scared me so much that I am not even thinking about buying any other foreclosed prop in TX anymore. Back in Illinois, you can do a whole lot.
So here I am stuck…any suggestion???
you wanted benefit of homestead, part of that benefit is the legislature of Texas “protecting” people from risking more than 80%of their homes value, by doing a cash out. Home equity loans have only been in existence in Texas for about 5 years, this was the legislative compromise. Refinance as a noo, but you will loose the tax advantage and pay a higher interest rate.
thanks for replying wasj.
So basically I am stuck with this property unless I sell it. The only way I can think of is to sell it to a freind of mine and buy it back. I may have to pay closing cost but will see how much would that comes to …or is it even worth it!!!
How about if I sell this house to my corporation…do you guys think that can be done???
Selling a home to your corp can be tough. Is it over 2yrs old? What type is it? Does it have existing credit? Its not easy for a corp to buy RE in the beginning and you need to find the right broker. However i do not know TX laws but heard they are pretty whachy. I have no idea why local gov’t are trying to dictate what we do with our homes and mortgages.
If you do not live in the home, i.e. it is actually noo, check with a title co. and/or tax appraisal district in your county, you may be able to “lose the homestead status” thereby giving you the option of more cash out. Do a little research, including with a knowledgeable mortgage broker.
I am MB located in Texas and have run into this issue many times. Even if you “lose the homestead status” you will still have issues because you are living in the house and listing it as your primary residence. There is not a loophole to allow you to avoid the “texas cash-out” law. To get NOO status you will have to move out of the house, establish a residence elsewhere, find a tenant, then move forward with the refinance. Hope this helps.
Thanks for replying. I have a house in Chicago, IL as my primary residence. This is the house I bought for REI but since I am here for a little while, I decided to stay in it. Can we show this as our second home and something can be done…BTW, I still hold residency of Illinois…
That is the answer to your problem. Also, if it is a second home it will save you money on the rate. It will also allow you to go to a higher LTV than the homestead property. Do you have an Illinois driver’s license?