Texas home equity rules at a glance
- 80% limit: the new loan plus all other liens can’t exceed 80% of the home’s fair market value.
- One at a time: only one home equity loan can be secured by your homestead at a time.
- 12-day wait: the loan can’t close until 12 days after you apply or receive the required notice, whichever is later.
- 3-day right to cancel: you can rescind within 3 days after closing without penalty.
- Fee cap: fees are generally capped at 2% of the loan, with exceptions for some third-party costs.
- Once a year: you generally can’t take another home equity loan within a year of the last one.
- HELOCs: each advance must be at least $4,000, and the lender can’t change terms on its own.
Common ways Houston homeowners pay
| Option | Good for | Watch for |
|---|---|---|
| Cash and savings | Smaller projects | Keep a 10–15% contingency |
| Home equity loan | A fixed project budget | 80% limit and 12-day wait |
| HELOC | Projects paid in stages | $4,000 minimum draws; variable rates |
| Cash-out refinance | Large projects when rates suit you | Changes your whole mortgage |
| Personal loan | Speed, no lien on the home | Higher rates, shorter terms |
Plan the timing
Because of the 12-day wait and appraisal time, start a home equity application before you sign a construction contract. A written scope and estimate from your contractor helps the lender and the appraiser.
Common questions
How much can I borrow against my house in Texas?
All loans secured by your homestead, including the new one, generally can’t exceed 80% of its fair market value.
How long does a Texas home equity loan take?
At least 12 days from application or notice, plus appraisal and underwriting. Many close in three to six weeks.
Is this financial or legal advice?
No. It summarizes the Texas Finance Commission’s consumer disclosure. Talk to your lender or a Texas attorney about your situation.
Sources
This guide is general information, not legal, tax or financial advice. Rules change; confirm details with the agency named in the sources or a licensed professional.