Home Equity
Home Equity Loans in Houston
Published September 24, 2026 · Last updated September 30, 2026
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The short answer
Houston home equity loans follow Texas rules. Your new loan plus other debt on your home generally can't pass 80% of its fair market value. There's a 12-day wait before closing and a 3-day right to cancel after. Your home backs the loan, so you could lose it if you don't repay.
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Houston homeowners have Texas-specific home equity rules
Texas is different from most states when it comes to borrowing against a primary residence.
For a Texas constitutional home equity loan, the new loan plus other debt secured by the homestead generally cannot exceed 80% of the home's fair market value at the time the loan is made.
That means having $100,000 of equity on paper doesn't necessarily mean you can borrow $100,000.
A simple example
Suppose a Houston home is valued at $400,000.
80% of that value is:
$320,000
If the homeowner already owes $250,000 in debt secured by the home, the difference is:
$70,000
That illustrates the maximum space between the existing secured debt and Texas's 80% constitutional limit.
It does not mean the homeowner will qualify to borrow $70,000.
The lender can impose stricter requirements and will still consider credit, income, debts, property eligibility, valuation, and its own underwriting standards.
Texas also makes you wait
A Texas home equity loan generally cannot close until at least the 12th day after the homeowner submits the application and receives the required constitutional notice.
That's not lender red tape. It's part of Texas's home-equity protections.
Texas home equity borrowers also generally receive a three-day right to rescind after closing.
Houston property value deserves a closer look
For many Houston-area homeowners, the number that matters for borrowing is the lender's determination of fair market value.
Don't confuse that with the taxable value shown after homestead exemptions.
Harris Central Appraisal District explains that homestead exemptions reduce the value used to calculate certain property taxes. That does not mean a lender uses that reduced taxable value to calculate your available home equity.
Ask the lender what property value it is using and how that value was determined.
What to ask before closing
Ask:
- What value are you using for my home?
- What is my combined loan-to-value after this loan?
- How much cash will I actually receive?
- Is the rate fixed?
- What is the APR?
- What are my total closing costs?
- What will my monthly payment be?
- What happens if I pay the loan off early?
- Is this being structured as a Texas Section 50(a)(6) home equity loan?
The catch to understand
Using a home equity loan to pay off credit cards can replace several payments with one.
But you're also taking debt that may have been unsecured and putting your home behind it.
Texas gives homeowners meaningful protections around home equity lending, but those protections don't make the payment optional.
If you can't repay a home equity loan according to its terms, your home can ultimately be at risk.
Keep reading
Compare a Texas home equity loans, Houston cash-out refinance, HELOC.
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Related services
HELOC
See how a home equity line of credit works, and what can change your payment later.
Cash-Out Refinance
Explore replacing your mortgage with a larger loan and taking the difference in cash.
Home Equity Investments
See how a home equity investment (HEI) trades part of your home's future value for cash now.
Sources
- Texas Constitution, Article XVI, Section 50
- Texas Office of Consumer Credit Commissioner, Home equity lending
- Harris Central Appraisal District, Exemptions
- Consumer Financial Protection Bureau, What is a home equity loan?