Home Equity
Cash-Out Refinance in Texas
Published September 24, 2026 · Last updated September 30, 2026
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The short answer
A Texas cash-out refinance on your homestead counts as a home equity loan under the state constitution. Your homestead is the home you live in as your main home. So the same protections apply: an 80% limit, a 2% cap on most fees, a 12-day wait before closing, and in most cases no personal liability.
Your home backs the loan, so you could lose it if you don't repay.
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What Texas rules mean for a cash-out refinance
80% limit. Your new loan, plus any other loans on your home, can't be more than 80% of its fair market value. Many other states allow more. Texas doesn't.
2% fee cap. Most fees can't total more than 2% of the loan. Third-party appraisals, surveys, and title insurance don't count toward it.
12-day wait. You can't close until at least 12 days after you apply and get the required Texas notice.
Where it closes. Only at the lender's office, an attorney's office, or a title company.
Everyone has to agree. Each owner of the home, and each owner's spouse, must consent.
No personal liability. If you default, the lender can go after the home, but in most cases not your other assets or wages. It needs a court order to foreclose.
Right to cancel. You can cancel within 3 days after closing.
How much cash can you take out in Texas?
Take 80% of your home's value and subtract what you owe. For example, if your home is worth $350,000, 80% is $280,000. If you owe $200,000, you could take out up to about $80,000, before closing costs.
The lender's appraisal sets the value used in the math.
The big thing to check first
A cash-out refinance replaces your whole mortgage. If your current rate is lower than today's, you'd give it up on your entire balance. A Texas home equity loan or HELOC might let you keep your current mortgage and borrow only what you need.
What happens when you refinance again later
Once your mortgage becomes a Texas home equity loan, it keeps those rules. Since a 2017 change to the Texas Constitution, you may be able to refinance it into a regular mortgage later. Usually that requires at least a year to have passed, no new cash, and the new loan fitting within the 80% limit, among other conditions.
If you do that, you lose some Texas home equity protections, like the no-personal-liability rule. Ask the lender to explain your options before you sign.
What a Texas cash-out refinance costs
Price range
We don't list rates or payments on this page. Your rate and terms come only from a lender, based on your situation. Compare offers from more than one lender.
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The 2% cap limits most lender fees. Appraisals, surveys, and title insurance are extra. Ask for the Loan Estimate and compare it across lenders.
What to ask before you choose
- "Will this be a Texas home equity loan?" If you're taking cash out of your homestead, it should be.
- "How much cash can I get under the 80% limit?"
- "What's the APR compared to my current rate?"
- "Which fees count toward the 2% cap?"
- "What are my options if I want to refinance again later?"
The catch: a new 30-year loan resets your payoff clock. Even with a lower payment, you could pay more interest in total. Compare the total cost, not just the monthly payment.
Keep reading
Compare a Texas home equity loan, a HELOC, or a home equity investment. Your lender will require Texas homeowners insurance.
More Texas guides: Texas homeowners insurance · Texas car insurance · Texas roofing laws · Texas home equity loans · Houston homeowners insurance · Houston car insurance · Houston roof replacement · Dallas homeowners insurance · Dallas car insurance
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