Popular Uses
How Houston Homeowners
Use Their Equity
Houston’s strong home appreciation means many homeowners are sitting on significant equity. Here’s how our clients put it to work:
Texas HELOC Calculator
How Much Can You Borrow?
Enter your home’s value and current mortgage balance to see your maximum HELOC availability under Texas’s 80% constitutional cap.
Calculate Your Texas HELOC Availability
This calculator provides estimates based on Texas’s 80% combined LTV constitutional cap (Article XVI, Section 50). Actual HELOC availability depends on your lender’s appraised value, credit score, debt-to-income ratio, and other underwriting criteria. This is not a commitment to lend.
The Basics
What is a HELOC?
A Home Equity Line of Credit (HELOC) lets you borrow against the equity you’ve built in your home — similar to a credit card, but secured by your property. You’re approved for a maximum credit line, and you draw from it as needed during the draw period (typically 10 years), paying interest only on what you use. After the draw period ends, you enter the repayment period and pay back principal plus interest.
Because your home secures the loan, HELOC rates are significantly lower than credit cards or personal loans — making it one of the most cost-effective ways for homeowners to fund large projects, consolidate debt, or create a financial safety net.
Texas is unique. Texas has the strictest home equity lending rules in the country, enshrined in Article XVI, Section 50 of the Texas Constitution. Before you apply, you need to understand what’s different here.
Compare Your Options
HELOC vs. Cash-Out Refi
vs. Home Equity Loan
Not sure which product is right for you? Here’s how they compare in Texas:
| HELOC | Cash-Out Refi | Home Equity Loan | |
|---|---|---|---|
| Structure | Revolving line of credit | New first mortgage | Lump sum, fixed |
| Rate Type | Variable (usually) | Fixed or ARM | Fixed |
| Texas LTV Cap | 80% CLTV | 80% CLTV | 80% CLTV |
| Draw as Needed | ✓ Yes | ✗ No | ✗ No |
| Keeps Existing Rate | ✓ Yes | ✗ No — replaces it | ✓ Yes |
| Best For | Ongoing projects, flexibility | Lowering rate + getting cash | One-time large expense |
| Annual Zero-Out Required | ✗ Texas only | N/A | N/A |
🤠 Texas HELOC Rules — What Makes Texas Different
80% LTV Cap — Constitutional
Your first mortgage + HELOC cannot exceed 80% of your home’s appraised value. This is a constitutional limit — no lender can exceed it regardless of creditworthiness. You must always retain at least 20% equity.
One Loan at a Time
Texas allows only one active home equity loan or HELOC per property at a time. You cannot have a HELOC and a home equity loan simultaneously on the same homestead.
12-Day Cooling-Off Period
You must wait at least 12 days after applying before closing on a Texas HELOC. This is a constitutional right — it cannot be waived.
Closing Location Required
Texas HELOCs must close at a lender’s office, attorney’s office, or title company. You cannot close at your home or other locations.
Fees Capped at 2%
Lender fees on a Texas home equity loan or HELOC are capped at 2% of the loan amount — not including third-party costs like appraisal or title.
Annual Zero-Out Requirement
Texas HELOCs require the borrower to reduce the outstanding balance to zero at least once per year. This is unique to Texas and not required in other states.
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