Tap your equity without touching your first mortgage.
A home equity line of credit lets you borrow against the equity you’ve already built — as a revolving line you draw from when you need it, not a lump sum — while leaving your existing first mortgage untouched. We place HELOCs through our wholesale lender partners and structure them around Texas’s home-equity rules, so you keep the low rate on your primary loan and only pay interest on what you actually use.
How a HELOC works — and why it beats refinancing a low rate
A HELOC is a revolving credit line secured by your home, sized off the equity between what you owe and what the property is worth. During the draw period — commonly up to ten years — you borrow what you need, pay it back, and borrow again, and you’re only charged interest on the outstanding balance. After the draw period the line converts to a repayment period where the balance amortizes over the remaining term.
The reason a HELOC matters right now: if you locked a low first-mortgage rate, a cash-out refinance would replace that whole loan at today’s higher rate just to pull equity. A HELOC sits behind your first mortgage as a second lien, so your primary loan and its rate stay exactly where they are — you only borrow against the equity, on top.
Texas home-equity rules you should know going in
Texas protects homestead equity more tightly than most states, under Article XVI, Section 50 of the state constitution. The headline rule: total loans against your homestead — your first mortgage plus the HELOC — can’t exceed 80% of the home’s fair market value. You can hold only one home-equity line at a time, each draw must be at least $4,000, and there’s a mandatory 12-day waiting period between application and closing, plus a 3-day right to cancel after closing.
These rules exist to keep Texans from over-leveraging the family home, and they shape how a Texas HELOC is structured and priced. We build the file around them from the start — confirming your combined loan-to-value, timing the 12-day notice, and comparing the HELOC against a cash-out refi or a fixed home-equity loan so you can see, in dollars, which one actually fits.
HELOC vs. home-equity loan vs. cash-out refinance
All three turn equity into usable cash, but they behave differently. A HELOC is a revolving, variable-rate line — best when you want flexibility and don’t need every dollar on day one. A fixed home-equity loan (a “HELOAN”) hands you a lump sum at a fixed rate and a set payment — better when you know the exact amount, like a single renovation or a payoff. A cash-out refinance replaces your first mortgage entirely, which only makes sense if today’s rate is at or below what you already have.
If you’re carrying a mortgage rate in the 3s or 4s, a HELOC or home-equity loan usually wins, because it leaves that rate alone. Tell us what the money is for and we’ll run the three side by side rather than steer you to whichever pays us — the point is the one with the lowest total cost for your situation.
Home Equity Lines (HELOC): common questions
How much can I borrow with a HELOC in Texas?
Texas caps total home-equity borrowing at 80% of your home’s fair market value, including your first mortgage. So if your home is worth $500,000 and you owe $300,000, the most you could access is $100,000 — 80% of $500,000 is $400,000, minus the $300,000 you already owe. We’ll confirm your exact number from a current valuation.
Will a HELOC change the rate on my current mortgage?
No. A HELOC is a separate second lien that sits behind your first mortgage. Your existing loan, its balance, and its rate stay exactly as they are — which is the whole point when you’ve got a low first-mortgage rate worth protecting.
Is a HELOC rate fixed or variable?
HELOCs are typically variable, tied to the Prime Rate plus a margin, so the rate moves with the market during your draw period. If you want a fixed payment you know in advance, a fixed home-equity loan may fit better — we’ll price both so you can compare.
What can I use a HELOC for?
Anything — home renovations, tuition, consolidating higher-interest debt, medical costs, or funding a business or investment. Because it’s revolving, it also works well as a standby line you open now and only tap when you actually need it.
How long does a Texas HELOC take to close?
Plan on a bit longer than other states because Texas requires a 12-day waiting period between your application and closing, plus a 3-day right of rescission afterward. Between that and the appraisal, most Texas home-equity lines close in roughly three to five weeks. We time the required notices so nothing stalls the file.
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Program features described above are general descriptions of loan programs offered by third-party lenders and are subject to change without notice. This is not an offer of credit or a commitment to lend. All loans are subject to credit approval, income and asset verification, property appraisal, and program eligibility requirements. Not all applicants will qualify. Verified Home LLC is a mortgage broker, not a lender, and arranges loans with third-party providers. NMLS #2693996. Equal Housing Opportunity.