Loan Program
Home equity lines in Texas, under the strictest rules in the country.
A revolving line against your homestead, capped at 80% and limited to one a year.
Licensed Texas Mortgage Broker · Based in Katy, TX
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Loan Selection
HELOC / Home Equity
A revolving line against your homestead, capped at 80% and limited to one a year.
The Limit Counts, Not the Balance
The full approved line counts toward the 80% cap even when undrawn, which usually means a smaller line than you would get elsewhere.
One Per Homestead Per Year
Opening a HELOC forecloses a cash-out refinance for twelve months. Decide which you actually want before opening either.
Interest Only on What You Draw
During the draw period you pay interest on the outstanding balance, not the limit, which suits costs arriving in stages.
HELOC / Home Equity Full Description
Everything you need to know before you apply.
A home equity line of credit is revolving borrowing secured against your house. Rather than taking a lump sum, you're given a limit and draw against it as you need to during a draw period, paying interest only on what is actually outstanding. After the draw period ends the line enters repayment, and the balance amortises over the remaining years. It suits costs that arrive in stages - a renovation billed by phase, say - far better than a lump-sum loan does, because you're not paying interest on money that is still sitting in your account.
Not sure if a home equity line fits your situation?
Why Texas HELOCs Behave Differently
Texas treats home equity borrowing as a constitutional matter, and a HELOC here is bound by the same section 50(a)(6) provisions as a cash-out refinance. Everything you owe against the homestead, the line's full limit included, has to stay within 80% of fair market value - and it's the limit that counts against the cap, not the balance you happen to be carrying. Lender fees are capped at 2%. The 12-day notice period applies before closing. And you may only take one such loan against a homestead in any twelve months, which means a HELOC opened this year forecloses a cash-out refinance until that period has run. Sequencing therefore matters more in Texas than elsewhere, and it is worth deciding which of the two you actually want before opening either.
If you would like to explore whether a home equity line matches your purchase price, credit profile and long-term budget, reach out to 3E Lending to speak with our licensed Texas mortgage team in Katy.
HELOC / Home Equity - Quick Reference
Straight answers to what borrowers ask most, each one showing the guideline or investor practice it comes from — so you can see where the answer came from, not just take our word for it.
Credit Score
680-700 typical minimum, and higher than for a first mortgage.
Source: Investor overlays - varies by lender
Credit History / Strength
Clean recent history required. Second-lien risk is priced conservatively.
Source: Investor overlays - varies by lender
Interest Rates
Usually variable, tied to prime plus a margin, and above first-mortgage rates.
Source: Investor pricing - varies by lender
Income / Employment Verification
Full documentation, as with any Texas home equity product.
Source: Investor guidelines - HELOCs sit under 12 CFR 1026.40, not the ATR rule · varies by lender
Self Employment Qualifications
2 years of returns typical.
Source: Investor overlays - varies by lender
Documentation Difficulty
Full doc plus the Texas 12-day notice and its closing requirements.
Source: Tex. Const. art. XVI, sec. 50(a)(6)(M); 7 TAC 153.12; full doc is a lender overlay
Debt to Income (DTI)
43-50%, calculated using the fully drawn line rather than the balance.
Source: Investor overlays - varies by lender
Down Payment Requirement
Not applicable. 20% equity must remain after the full line is counted.
Source: Tex. Const. art. XVI, sec. 50(a)(6)
Down Payment Collateral Alternatives
Not applicable to a home equity line.
Source: Tex. Const. art. XVI, sec. 50(a)(6)
Out of Pocket Fees
Lender fees capped at 2% of the loan amount under Texas law.
Source: Tex. Const. art. XVI, sec. 50(a)(6)
Process Speed / Timeframe
The 12-day notice is an unwaivable floor. Total time typically runs 30-45 days.
Source: Tex. Const. art. XVI, sec. 50(a)(6)(M)(i); 7 TAC 153.12
Figures on this page reviewed by Kimberli Pham, Mortgage Broker · NMLS ID 2459395, on . Program terms are set by the lender a file is placed with and change over time — each figure cites its source above.
The Texas limits above - the 80% cap, the 2% fee ceiling, the 12-day wait and the once-a-year restriction - are set by the Texas Constitution and do not vary by lender. Everything else does: rate, credit requirements, and whether a given lender will write the loan at all. The figures here are program guidelines, not a quote, and actual terms vary by circumstances. Nothing on this page is a commitment to lend. Approval depends on completion of underwriting, and not every applicant qualifies.
What Our Clients Say
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