HELOC Loans in Texas
Home Equity Line of Credit (HELOC)
Texas homeowners can access their property’s equity through a HELOC (home equity line of credit), offering flexible financing for renovations, education, or major purchases. However, Texas has unique legal restrictions: total home equity loans—including your mortgage—cannot exceed 80% of your home’s value. Most lenders also require a minimum credit score of 620 and at least 15% equity. HELOCs offer a revolving credit line with a draw period of up to 10 years, followed by a repayment period. For borrowers seeking a lump sum with fixed payments, home equity loans are an alternative. Texas credit unions, regional banks, and online lenders provide a variety of programs tailored to these guidelines.
How to qualify
To obtain a quote, we will need the following information:
Property Value and
Purchase Price
Down Payment
Amount
Credit Score
Asset Types
- Single Family Homes
- Townhomes
- Condos
- 2 - 4 Units (Duplex, Triplex, Quadplex)
- Multi-Family: 5 - 8 Units
- Mixed-Use: 2 - 8 Units
- Multi-Family: 9+ Unit
Loan Terms
- Loan Sizes:
$100k up to $3.5 Million (Larger loan sizes available on a case by case basis)
- Purchase LTV:
Up to 85%
- Rate & Term Refinance LTV:
Up to 80%
- Cash Out Refinance LTV:
Up to 80%
- Amortization:
30 Year % 40 Year Amortization Options Available
- Term Lengths:
5/6 ARMs, 7/6 ARMs, 10 Year Interest Only, 30 Year Fixed & 40 Year Fixed
- Floor Rate:
5.50% (subject to change daily due to market volatility)
- Full Recourse
with personal guarantee required for all borrowers with majority ownership (typically 20%+ or 25%+ if closing in an Entity)
- DSCR Requirement: 1.00x or greater depending on loan size and property type. Sub-1.00x DSCR and NO DSCR options available.
- Vesting:
Lending to Individuals, LLCs, and Corporations. Trusts Allowable on a Case by Case Basis.
- Average Time to Close:
14 to 35 days
Wondering if you qualify for investment property financing in your area?
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Frequently Asked Questions
What is a HELOC and how does it differ from a home equity loan?
A HELOC in Texas offers a credit line that you can draw from as needed during the draw period. A home equity loan provides a lump sum at a fixed rate with monthly payments. Choose a HELOC for flexible access and a loan for large, upfront costs.
How do HELOC rates work and what affects the interest rate?
HELOC rates in Texas are generally variable and tied to the prime rate. Your actual rate depends on your credit score, loan-to-value ratio, income, and lender-specific factors. Some lenders offer intro APR discounts or fixed-rate conversion options.
Can I qualify for a home equity loan in Texas with low credit?
Yes, Texas homeowners may qualify for a home equity loan with low credit, though terms may be stricter. Most lenders prefer a 620+ score, but some credit unions consider applicants in the 580–620 range. Expect more documentation and higher rates.
How much equity do I need in my home to get a HELOC?
Texas law requires that the total of all home loans—including your HELOC—must not exceed 80% of your home’s fair market value. Most lenders require at least 20% equity and solid credit to qualify.
Are home equity loans in Texas better for large expenses?
Yes, home equity loans in Texas are often used for large, one-time expenses such as home renovations or medical bills. These loans offer fixed rates and predictable monthly payments, unlike the variable nature of HELOCs.
What are typical equity rates and loan terms in Texas?
In Texas, HELOC APRs usually range from 7% to 10%, depending on credit, equity, and lender. These loans include a draw period of up to 10 years and a repayment phase of 10 to 20 years. Home equity loans typically offer fixed terms of 5 to 30 years.
Considering other markets? Compare equity loan options in Oklahoma , Louisiana , Arkansas , and New Mexico for nearby lender programs and regional differences.
