Texas protects homesteads in its constitution, so a cash-out refinance on your primary home follows rules no other state has. Clear2 walks homeowners in Dallas, Austin, Houston, San Antonio, and Fort Worth through those rules before they apply, so the 12-day notice and closing day hold no surprises.
A cash-out refinance replaces your existing mortgage with a new loan for more than you currently owe. The difference comes to you as cash at closing. You keep living in your home, the old mortgage disappears, and you have a single new loan. The cash is yours to use without restriction.
Your current mortgage is paid off and replaced by a single new loan. The difference between your old balance and the new loan amount comes to you as cash. No second loan to manage. No separate monthly payment.
Mortgage rates are almost always lower than credit cards, personal loans, or home equity lines. Consolidating high-interest debt into a mortgage rate can meaningfully reduce your total monthly obligations.
Home renovation, debt payoff, college tuition, a rental down payment, or simply building a reserve. Lenders don't restrict how you spend cash-out proceeds. It's your equity, and it's your decision.
Texas's statewide median home price was about $330,000 in late 2025. Austin pulled back the most from its 2022 peak, while Dallas, Houston, and San Antonio stayed closer to flat. For anyone who bought before 2020, the run-up still left a lot of equity on the table.
Say you bought in Fort Worth in 2018 for $230,000 with 5% down. That home may be worth around $330,000 today. Even with Texas's 80% cap on homestead cash-out loans, that can leave $60,000 or more you can access, depending on your balance.
Texas sets the strictest rules in the country for borrowing against a homestead. They're there to protect you, and none of them are hard to work with when you know them ahead of time.
Not sure what your home is worth today? Start with the Texas mortgage guide or ask us for a free market estimate.
Approximate 2025 median sale prices from Redfin and local Realtor association data, compiled by Clear2 Mortgage in July 2026. Ask Clear2 for a current estimate on your address.
A cash-out refinance on your Texas homestead is legally a home equity loan under Section 50(a)(6) of the Texas Constitution. Here's what that means for you.
Your new loan, plus any other loans on the home, can't go over 80% of its appraised value. This cap applies to every program, VA and FHA included, as long as the home is your homestead.
You'll get a written notice explaining your rights, and you can't close until at least 12 days after you receive it and apply. We start that clock on day one so it doesn't slow your close.
You'll sign at a title company, an attorney's office, or the lender's office. Home signings aren't allowed for this kind of loan.
After you sign, you have 3 business days to cancel for any reason. Funds go out after that window closes.
Most lender and broker fees can't go above 2% of the loan amount. Appraisal, survey, title insurance, and a few other third-party costs aren't counted toward that cap.
You can take a 50(a)(6) loan on the same homestead only once in a 12-month period. Both spouses need to sign, even if only one is on the loan.
There's no wrong reason to use equity you've earned. These are the situations we see most often from Texas borrowers.
Hail-damaged roofs, foundation work, and storm-hardening improvements are common Texas projects. Cash-out funds let you pay contractors up front and get the work done before the next season.
Rolling high-rate debt into your mortgage can lower your total monthly payments. Since Texas limits you to one equity loan every 12 months, it helps to borrow what you need for the full plan in one go.
Equity from your home can fund a down payment on a rental in DFW, Houston, or San Antonio. The rental can then close on a Texas DSCR loan that qualifies on its rent.
Pools and backyard projects are popular across Texas. Bigger projects like an added bedroom or a guest house can add value that offsets the equity you use.
The right product depends on your goal, your current rate, and how much equity you want to access. Clear2 will help you run the numbers on each option.
Happy with your current mortgage rate? A Texas HELOC lets you borrow against your equity while your first mortgage stays exactly as it is. If you only want a lower rate or shorter term with no cash out, see our refinance options.
These are general guidelines based on current lender standards. Individual lender overlays may be stricter. Clear2 shops multiple lenders to find the program that fits your profile.
Texas note: On a Texas homestead, every program is capped at 80% LTV under Section 50(a)(6). The higher FHA and VA limits shown above apply outside Texas or to non-homestead property where the program allows.
Every situation is different. These examples show how a cash-out refinance plays out at different equity levels and goals. Figures are illustrative and before closing costs.
Start with the Texas mortgage broker guide, see how a cash-out refinance works in other states, or pick a program or city below.
Chris Kachal helps Texas homeowners figure out whether a cash-out refinance actually makes sense for them, looking past the rate headline to the full cost.
A cash-out refinance is a big decision. Chris walks through the break-even point, the change in your monthly payment, the total interest over time, and how a cash-out refi stacks up against a Texas HELOC given your current rate and remaining term.
As an independent broker, Clear2 gives Chris access to 50+ lenders, which means competitive pricing without a single bank's markup built in.
Chris keeps it simple: run the real numbers, lay out the options side by side, and let you decide. No pressure and no upselling.
Five-star reviews from Clear2 clients on Google.
"Donavin was straightforward and a breeze to work with. Communication was quick and easy. The whole process was seamless and he was available for guidance or questions. I would not hesitate to use Clear2 Mortgage in the future."
"Alex was absolutely amazing from the beginning. He was patient and thorough with all of our questions. He even followed up after the process was finalized to ensure everything was still good. I would recommend him to everyone!"
"The process was seamless and every question I had as a first-time home buyer was answered. My loan officer gave me his professional opinion based on my specific circumstances to personalize my loan."
How much can I cash out on my Texas home?
On your Texas homestead, the new loan plus any other loans on the home can't go over 80% of the appraised value. That cap applies to conventional, FHA, and VA. Your cash amount is 80% of the value minus what you owe, less closing costs.
What is Texas Section 50(a)(6)?
Section 50(a)(6) is the part of the Texas Constitution that allows home equity borrowing on a homestead, including cash-out refinances. It sets an 80% loan-to-value cap, a 12-day waiting period before closing, a 2% cap on most fees, closing at an approved office, a 3-day right to cancel, and a limit of one such loan per 12 months.
Why do I have to wait 12 days to close?
Texas law requires at least 12 days between receiving your written notice of rights, along with your application, and closing. The idea is to give you time to think. Clear2 starts that clock on the day you apply, so it fits inside our 30-day close.
Is a cash-out refi or a HELOC better in Texas?
Both fall under Section 50(a)(6) on a homestead, so the 80% cap applies either way. A Texas HELOC lets you keep your current first mortgage rate, which helps if that rate is low. A cash-out refinance makes sense when you can match or beat your current rate and want one fixed payment.
Can I refinance my Texas cash-out loan later?
Yes. You can refinance a 50(a)(6) loan into a regular mortgage later if you take no new cash beyond closing costs and the loan stays at or under 80% of the home's value. Another cash-out has to wait at least 12 months from your last one.
Does Section 50(a)(6) apply to my rental property?
No. The rules protect homesteads. A cash-out refinance on a Texas rental follows standard investment property guidelines, usually up to 70-75% LTV, without the 12-day wait or the 2% fee cap.
No obligation and no hard credit pull to start. Chris will walk through your numbers and lay out your options before you commit to anything.
Clear2 Mortgage, LLC. NMLS #1911663. Licensed Mortgage Broker. 2600 W Big Beaver Rd, Suite 100, Troy, MI 48084. Equal Housing Lender. This is not a commitment to lend. All loans subject to credit approval, property appraisal, and underwriting guidelines. Rates and terms subject to change without notice. Texas home equity loans are subject to Section 50(a)(6) of the Texas Constitution.
