Home Equity Loans in Texas
Texas homeowners have built serious equity — and Texas law gives you the strongest homestead protections in the country when you tap it. A home equity loan or HELOC gets you cash without touching your low-rate first mortgage. Adam and his team shop multiple lenders so those protections come with competitive terms.
What is a home equity loan in Texas?
A home equity loan lets Texas homeowners borrow against the value they’ve built in their homestead — either as a fixed lump sum (a home equity loan) or a flexible line of credit (a HELOC). Under Texas law, all borrowing against your home is capped at a combined 80% of its value, with a 12-day waiting period and other protections unique to Texas. Both options sit behind your existing mortgage, which stays untouched.
Key takeaways
- Your first mortgage stays put. A second-lien equity loan or HELOC leaves your existing rate alone — you pay today’s rates only on the new money, not your whole balance.
- Texas caps borrowing at 80% of your home’s value across all liens combined — you always keep at least 20% equity.
- Built-in cooling-off: a 12-day waiting period after application, plus a 3-day right to cancel after closing.
- Two structures: a fixed lump-sum loan for one-time costs, or a HELOC you draw from as needed for phased projects.
- Homestead only. These Texas rules govern your primary residence; investment properties follow different guidelines.
- Veterans note: VA cash-out refinancing isn’t available in Texas — a second-lien equity loan is often the best way to tap equity while keeping a low-rate VA first mortgage.
How home equity lending works
Your equity is simple math: what your home is worth minus what you owe on it. Years of payments plus Texas’s strong price growth mean many homeowners are sitting on six figures of it. Equity lending converts part of that value into cash you can use — while you keep living in and owning your home.
The structure matters. Both a home equity loan and a HELOC are typically second liens: they sit behind your existing mortgage rather than replacing it. If you locked a low first-mortgage rate — as most Texans who bought or refinanced before rates rose did — that’s the whole game. Replacing your first mortgage to reach equity would reprice your entire balance at today’s rates; a second lien prices only the new amount.
As an independent Texas mortgage broker, Adam and his team shop multiple lenders for your equity loan the same way they do for a purchase — lenders compete, you win, and nobody pressures you into borrowing more than your plan needs.
Home equity loan vs. HELOC
Same collateral, different shapes. The right one depends on how you’ll use the money:
| Feature | Home equity loan | HELOC |
|---|---|---|
| How you get funds | One lump sum at closing | A credit line you draw from as needed |
| Rate | Typically fixed | Typically variable |
| Payments | Predictable, set schedule | Based on what you’ve drawn |
| Best for | One-time costs: debt consolidation, a single big project, a purchase | Phased spending: room-by-room renovations, ongoing tuition, a safety line |
Plenty of homeowners are certain they want one and, after ten minutes on their actual plan, choose the other. We’ll walk through your numbers both ways.
The Texas rules that protect you
Texas treats your homestead differently than any other state — equity lending here runs under Section 50 of the Texas Constitution, with protections written for the homeowner:
- 80% combined LTV cap. All loans against your homestead — first mortgage plus equity borrowing — can’t exceed 80% of its value. You always keep at least 20% equity.
- 12-day waiting period. At least 12 days must pass between your application and closing — built-in time to review the terms without pressure.
- 3-day right to cancel. Even after you sign, you have three days to change your mind and cancel the loan.
- Fee limits. Texas caps certain lender fees on home equity loans, keeping costs in check.
- Homestead only. These rules apply to your primary residence — the home Texas protects hardest.
How much you can borrow: the math
The 80% rule makes your maximum easy to estimate: multiply your home’s value by 0.80, then subtract what you owe. Here’s a typical Texas picture:
| Home value (example) | $350,000 |
| 80% Texas maximum (all liens combined) | $280,000 |
| Current mortgage balance | $200,000 |
| Potential accessible equity | ~$80,000 |
Your real number depends on your specific home’s appraised value and your balance — and values vary enormously across Texas, which is exactly why we built the city guides below. We’ll estimate yours from real local data before anything formal.
Want your real equity number?
Tell us your city, your neighborhood, and roughly what you owe. We’ll run the Texas 80% math on your actual home and shop multiple lenders — no upfront credit check.
LET’S TALKEquity loan vs. cash-out refinance
Texas gives you two roads to your equity, and the right one usually comes down to your current first-mortgage rate:
| Option | What happens to your first mortgage | Usually wins when… |
|---|---|---|
| Home equity loan / HELOC (this page) | Untouched — the new borrowing sits behind it as a second lien | Your existing rate is below today’s market — you protect it and price only the new money |
| Cash-out refinance (50(a)(6)) | Replaced entirely by one new, larger loan | Your existing rate is at or above today’s market — repricing everything at once can win |
Both routes live under the same Texas 80% cap. We run the total-cost math side by side, in dollars — and if you’re simply after a lower rate with no cash, a straight rate-and-term refinance is the third road.
What Texans use their equity for
- Renovations that add value — kitchens, baths, additions, pools; projects that improve both your life and the asset securing the loan.
- Consolidating higher-interest debt into one lower, often fixed payment.
- A down payment on the next property — investment, land, or a second home — without selling the one you’re in.
- Education, medical, and family costs at rates far below unsecured borrowing.
- A ready line for the unexpected — a HELOC you never draw costs little to keep, and it’s there when the roof isn’t.
One honest caution: your home secures this loan. We’ll never encourage borrowing against your homestead for spending that doesn’t serve your bigger plan — and we’ll tell you plainly if we think a plan is risky.
What it costs
Home equity lending is generally cheaper to close than a full refinance, but it isn’t free — and Texas helps you here too, with fee limits on certain home equity loans that cap what lenders can charge. Expect some combination of an appraisal or valuation, title work, and recording costs; on HELOCs, watch for annual fees or early-closure fees, which vary by lender and are exactly the kind of terms we compare when we shop.
The bigger cost question is rate structure: a fixed lump-sum loan locks your cost of borrowing on day one, while a HELOC’s variable rate can move with the market — fine for a line you’ll draw briefly, worth stress-testing for a balance you’ll carry. We’ll show you the true all-in cost of each option side by side, in dollars, so the cheapest-looking offer and the actually-cheapest offer don’t get confused.
Step by step: the process
- Estimate your equityWe run the 80% math on your home’s realistic value and your balance. No upfront credit check to start.
- Pick the structureLump-sum loan, HELOC, or cash-out — matched to your plan and your current first-mortgage rate, with the math shown side by side.
- Compare lendersWe shop multiple lenders and bring you the strongest rate and terms.
- Apply and wait the 12 daysTexas’s waiting period runs from application; we set the schedule so it costs you no momentum.
- Close — with 3 days to reconsiderYou sign, your right-to-cancel window passes, and your funds or credit line become available.
Texas metros we serve
Home values — and therefore your accessible equity under the 80% rule — vary widely across Texas. These city guides cover local values, neighborhoods, and the equity math for each market:
Houston
Texas’s largest metro — equity strategies from the Inner Loop to the suburbs.
Dallas
Strong appreciation has built deep equity across the Metroplex.
Fort Worth
Cowtown’s growth corridors, from established neighborhoods to new builds.
San Antonio
Military City USA — equity options that respect low-rate VA first mortgages.
Austin
Boom-era buyers hold substantial equity even after the market’s cool-down.
Frisco
High values in Collin County mean large accessible-equity numbers.
Killeen
Fort Hood families: tap equity while keeping your low-rate VA first mortgage.
El Paso
Steady borderland appreciation has quietly built equity for longtime owners.
Texas home equity FAQs
How much equity can I borrow in Texas?
All borrowing against your homestead — first mortgage plus equity loans — is capped at a combined 80% of your home’s value. Multiply your home’s value by 0.80 and subtract your mortgage balance for a quick estimate of what’s accessible.
Do I have to refinance my first mortgage to get equity out?
No. A home equity loan or HELOC is a second lien that sits behind your existing mortgage, leaving its rate untouched. That’s usually the better route when your current rate is lower than today’s market. A cash-out refinance — which does replace the first mortgage — wins when your existing rate is high anyway.
What’s the difference between a home equity loan and a HELOC?
A home equity loan is a fixed lump sum with predictable payments — good for one-time costs. A HELOC is a line of credit you draw from as needed, usually at a variable rate — good for phased projects or a standby line. Same collateral, different shape.
Why does Texas make me wait 12 days?
Texas law requires at least 12 days between your application and closing on homestead equity lending — a consumer protection giving you time to review terms without pressure. You also get a 3-day right to cancel after closing. Both are automatic, and we plan your timeline around them.
Can I get a home equity loan on a rental property?
The Texas homestead rules on this page — the 80% cap, 12-day wait — govern your primary residence. Investment properties follow different (often more flexible, but differently priced) guidelines. Tell us which property you mean and we’ll map the right path.
I have a VA loan — can I still tap my equity in Texas?
Yes. While a VA cash-out refinance isn’t available in Texas, a second-lien home equity loan or HELOC works alongside your VA loan and leaves its low rate untouched — usually the smartest equity path for Texas veterans.
What credit score and income do I need?
Guidelines vary by lender — which is exactly why we shop several. Stronger credit and lower debt-to-income earn better pricing, but one lender’s no isn’t the market’s answer. We’ll review your full picture with no upfront credit check.
Can I pay off a home equity loan early?
Generally yes — and paying ahead reduces your interest cost. We’ll confirm the specific terms of any loan we bring you, and flag anything that limits early payoff before you sign.
How long does the whole process take?
Plan on several weeks: the 12-day Texas waiting period sets the floor, plus appraisal and underwriting time. We’ll give you a realistic date up front and keep the file moving so the state-required wait is the only wait.
How do I start?
Reach out with your city, your home’s neighborhood, and roughly what you owe. We’ll estimate your accessible equity, compare loan vs. HELOC vs. cash-out honestly, and shop multiple lenders — no upfront credit check.
About Adam Bartling
Loan Officer · NMLS# 2213358 · Retired U.S. Army Captain
Adam served 22 years in the U.S. Army and retired as a Captain before becoming a Texas mortgage broker. On equity lending, his team’s education-first approach means respecting Texas’s homestead protections, running loan-vs-HELOC-vs-cash-out math honestly, protecting the low first-mortgage rates clients already earned, and never encouraging borrowing that doesn’t serve the bigger plan. Adam and his team serve homeowners across Texas and stay a lender for life with an annual review.
Your equity. Your rate. Your terms.
Tap what your Texas home has built — under the strongest homestead protections in the country, with a team that shops multiple lenders and tells you the truth about which path wins. No upfront credit check, no pressure.
LET’S TALK