Section 50(a)(6) of the Texas Constitution governs cash-out refinancing on homestead properties. 80% LTV cap, 12-day cooling period, 2% fee cap. We handle the complexity.
Constitutional protections unique to Texas homestead properties.
The Texas Constitution limits cash-out refinances on homestead properties to 80% loan-to-value. You cannot borrow more than 80% of your home's appraised value, regardless of the loan program.
Texas requires a mandatory 12-day waiting period between your loan application and closing. This 'cooling off' period gives you time to consider the transaction and cannot be waived.
Lender fees on a Texas cash-out cannot exceed 2% of the loan amount (the cap dropped from 3% to 2% on January 1, 2018). Third-party fees (appraisal, title) are excluded from this cap. This protects borrowers from excessive closing costs.
You can only complete one Texas cash-out refinance per 12-month period on the same homestead property. The clock starts from the closing date of the previous cash-out.
Section 50(a)(6) rules apply only to your primary homestead property. Investment properties and second homes follow standard (non-Texas) cash-out guidelines with higher LTV available.
After closing, you can convert a 50(a)(6) loan to a standard rate & term refinance if your balance drops below 80% LTV. This lifts all Texas-specific restrictions from the lien.
Texas is the only state with constitutional restrictions on cash-out refinancing. Here's what that means for you. We serve borrowers in San Antonio, Houston, Austin, and beyond.
Texas's 50(a)(6) rules exist to protect homeowners from over-leveraging their homestead. The 80% LTV cap ensures you always retain at least 20% equity in your home.
The 2% lender fee cap is unique to Texas and saves borrowers thousands compared to standard cash-out refinances in other states. On a $400K loan, the max lender fee is $8,000.
Not all lenders understand 50(a)(6) rules. Mishandling the closing documents or timing can void the transaction. STX Lending is a Texas-based direct lender with deep 50(a)(6) experience.
Once your balance drops below 80% LTV, you can convert your 50(a)(6) lien to a standard lien via rate & term refinance — removing all Texas-specific restrictions.
Submit your application. The 12-day constitutional clock starts. We begin processing immediately while the cooling period runs.
Home appraisal confirms value. Title company prepares 50(a)(6)-compliant closing documents. Our underwriters review in parallel.
Loan receives final underwriting approval. All closing documents are prepared and reviewed for 50(a)(6) compliance.
Close on or after day 12. You receive cash within 3 business days. Your old mortgage is paid off automatically.
If you don't want to replace your current low-rate mortgage, a HELOC might be a better fit. It gives you revolving access to your equity while keeping your first mortgage intact.
Explore HELOC OptionsRun the numbers using our refinance calculator or home equity calculator before you commit. These tools answer the questions every refi shopper asks.
Find out when your refinance pays for itself and whether the closing costs are worth it.
Should you buy discount points to lower your rate? See break-even months and lifetime savings.
See how extra payments shave years off your loan and save tens of thousands in interest.
Common questions about 50(a)(6) refinancing in Texas.
80% LTV • 2% fee cap • 12-day close • Constitutional protection. Or talk to a loan officer for a quote.
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