Texas Refinance

Reduce your monthly mortgage payments and replace your existing mortgage with a new one! Access the latest interest rates, or even receive a lump sum payment from your home’s equity through a cash-out refinance loan. Our team can assist you in finding a refinance mortgage loan that fits your specific needs.

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Our Texas Mortgage Refinancing Options

We offer various refinancing choices, including cash-out refinance loans, rate-and-term refinances, and FHA and VA loans. 

Texas Refinancing Process

A loan officer from Arnaiz Mortgage will guide you through the entire process, making it simpler than ever to replace your current mortgage.

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On-Demand Texas Refinance Rates for Your Home Loan Needs

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Maximizing Benefits with Texas Home Refinancing

By swapping their original mortgage for a new loan with a better rate, Texas homeowners can enjoy lower monthly payments. Cash-out refinances enable you to pull cash from your home equity to use for college tuition, home improvement projects, or a down payment on a new property. Our team will match you with lenders offering a great mortgage rate, helping you save money over time. 

Why Refinance Your Texas Home?

A mortgage refinance allows you to take advantage of current interest rates in order to reduce your monthly debt payments. Reducing your interest rate by even 1% may save you as much as $200 a month, translating to thousands of dollars in savings over time.

You can switch your loan term for a longer or shorter one, depending on your needs. If you’re unhappy with your loan company, you can change mortgage lenders, as you’re replacing your current loan with a new mortgage.

With a Texas cash-out refinance, you receive a lump sum payment that can help you pay off higher-interest debt like student loans or use the funds to purchase investment properties and develop a strong passive income. 

When Should You Refinance Your Home in Texas?

Timing the market is crucial when deciding whether to replace your existing mortgage. If you can receive an interest rate that is at least 0.5% lower than your current rate, you’ll enjoy savings on your mortgage payments equal to the refinancing closing costs. You’ll also want to consider whether you have a higher credit score than when you first opened your mortgage to determine whether you’ll be eligible for a lower rate. 

If you’re seeking cash-out refinancing, consider how much cash you can receive compared to the cost of raising your loan balance. For example, if your home is worth $250,000 and you have a $180,000 loan amount, you can take out $190,000 to receive $10,000 and a lower monthly payment if you find a lower rate.

Finally, identify whether the current market conditions align with your financial needs. Cash-out loans can be helpful for high-interest debt consolidation and can offer a lower interest rate and a lump sum, saving you money over time. 

Why Choose Arnaiz Mortgage for Your Texas Refinance Needs?

Arnaiz Mortgage takes the time to understand your specific needs and match you to the loan types that can help you reach your goals. If you need a cash-out refinance, work with us to identify whether your financial history and credit score allow access to the best interest rates. 

We’ll also guide you through the loan application and answer all your questions so you can be assured that you’ve chosen the right loan type for your needs. 

Our brokers believe that trust is paramount when finding refinance loan options, so we strive to be transparent, explaining every factor involved and matching you to lenders with rates you’ll love. 

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Frequently asked questions about Texas Refinance

  • What is the 2% rule in Texas?

    To protect consumers seeking a cash-out refinance, Texas law prohibits lenders from charging closing costs in excess of 2% of the principal balance. This will include appraisal fees, underwriting fees, and credit history checks. As closing costs for a conventional mortgage refinance can be up to 6% in other states, you can save thousands in fees.

  • Can you refinance your mortgage in Texas?

    Yes, you can refinance your existing mortgage in Texas, but some restrictions exist. Only conventional loans are eligible for a cash-out refinance, though you can do a rate-and-term refinance for federal government-backed loans like Federal Housing Administration, VA, and USDA loans. 

    If you have had a short sale in the past, you must wait four years to pursue a refinance, and you must have had the current mortgage for at least 6 months. You can only get a cash-out refinance once every 12 months. 

    To get a refinance, you need to meet certain qualifications. Most lenders want a minimum credit score of 620, though some will expect a 640 credit score or higher. You should also have a debt-to-income ratio of no more than 43%. Again, some lenders will go higher than this, but some may want lower.

  • Why does Texas not allow cash-out refinance?

    Texas does not allow a cash-out refinance for government-backed loans like FHA, VA, and USDA loans, though these loans are eligible for a streamlined refinance that does not provide a lump sum payment. 

     

    This is because of the unique restrictions of Section 50(a)(6) in the Texas constitution, meant to protect homeowners from taking out more than they can afford, which may make them risk foreclosure.

  • What is the maximum cashback on a rate-term refinance in Texas?

    With a rate-and-term refinance, the borrower cannot receive more than $2,000 at the close in cash back. If this is your primary residence, Texas won’t allow you to receive any cash back.

  • How much can you cash out refinance in Texas?

    The loan-to-value ratio of a refinance cannot be more than 80%, and you must pay off any second mortgage using the proceeds of a cash-out refinance loan. As a bonus, though, this means that you won’t have private mortgage insurance premiums, which will also save you money each month. 

    For example, if your home is worth $250,000, you’d only be able to get a cash-out refinance loan for $200,000. If you wanted a $10,000 lump sum payment, you would need to have a loan balance of no more than $190,000.

  • What is the 50a6 rule in Texas?

    Section 50(a)(6) of the Texas Constitution places certain restrictions on cash-out refinances for conventional mortgages on a primary residence; these don’t apply to investment properties. You can only get a 50(a)(6) loan on a single-unit dwelling.

     

    The rules include retaining 20% home equity, and the total loan cannot be more than $647,200. Lenders must provide a 12-day cooling-off period. Additionally, you cannot get a 50(a)(6) cash-out refinance more than once a year, and you must get title insurance. On the plus side, the closing costs cannot be more than 2%.

  • What is a Texas 50A4 loan?

    A 50(a)(4) loan is a rate-and-term refinance of an existing home equity 50(a)(4) loan. These are called non-home equity loans because you simply change the loan term and rate, not getting cash out. 

     

    As with the 50(a)(6) loan, you must get a new appraisal, and there must be a 12-day cooling-off period. The loan-to-value ratio also can’t be more than 80%, just as with cash-out refinancing. You cannot receive more than $2,000 at the time of close.

  • Can you get a HELOC in Texas?

    Yes, you can get a home equity loan or Home Equity Line of Credit (HELOC); however, there are a few restrictions that are specific to Texas that you must know about.

    Just like with a cash-out refinance, you cannot have a loan-to-value ratio higher than 80%, and you can’t have home equity products simultaneously, meaning that you will have to choose between a HELOC and a cash-out refinance. Lastly, you can only take out a home equity loan or HELOC on your home of residence, not an investment property.