Advertisements

Texas home mortgage loans are a little different than the rest of the loans in most states when it comes to accessing equity in one’s home. In many states a homeowner is able to borrow up to 100% or more of the home’s appraised value. Texas home mortgage loans are unique in that a homeowner cannot access their home’s equity above 80% of the appraised value.

Because stringent laws in Texas were passed to protect individuals and their families, home equity loans were not even available in Texas until late 1997. Texas loans for home equity are highly regulated and as a result, many homeowners find themselves in better financial shape compared to other homeowners in different states.

As the housing bubble was on its way up in 2005-2007, many homeowners in states other than Texas cashed out and bought fancy cars and big screen TVs with the ‘found money’ from their inflated housing price. With the mortgage crisis in full meltdown by mid 2008, many homeowners who took out all of the cash find themselves upside down on their homes. They owe more on their house than it is worth.

Because Texas mortgage loans for home equity have been so strict it has actually saved many homeowners from their own greed. The same cannot be said of many homeowners in other states who are foreclosing at a record rate. In fact, the housing crisis is so severe in mid 2008 that it has caused the main buyers of mortgage loans, Fannie Mae and Freddie Mac, to lose 80% of their stock value.

The strict Texas loans for home equity allows a homeowner to only have one home equity loan at a time. While there are some additional financing arrangements possible, a second home equity loan cannot be obtained until the first has been paid in full. Also, only one home equity loan per year is allowed, regardless of how quickly the loan is repaid, and the loan may not be converted to any other type of loan.

There are other legal regulations that apply to Texas mortgage loans for home equity that are beyond the purview of this article and can be found on the Internet at Expert Law at www.expertlaw.com. Do a search for “An Overview of Home Equity Loans in Texas” to find the specific article that discusses the legal issues in more detail.

There is a lot of controversy about the 80% equity accessibility in Texas home mortgage loans for home equity. Many homeowners are angry that they cannot use the equity for situations like college funds, high interest debt reduction, home improvements and other uses that homeowners in other states have the right to do. Although their anger may be justified, it turns out that a homeowner in Texas is less likely to end up in foreclosure because of these restrictions. It is a case where maybe the “powers that be” in public policy, have done a good job at looking out for Texans as a whole. In the end it may prove to better keep you in your home for life, instead of out on the street because of foreclosure.

Related posts:

1. What Are The Home Equity Loan Rules In Texas?
2. Texas Mortgage Bridge Loans
3. Bad Credit Home Mortgage Loans
4. Jumbo Mortgage Loans
5. Housing Rescue Bill And FHA Refinance Loan – Part One