Lone Star State HELOC Rules

[Tia Wilson]

Hey there everyone,

I'm new to Texas and im trying to understand the rules for a HELOC for my duplex househack. I understand we can't do more than 80% LTV in Texas but I apparently misunderstood how this works as I was denied today BEFORE an appraisal was even ordered. So before I put my negotiating hat on tomorrow I wanted to further educate myself.

The way I understand it HELOCs work ARV-current mortgage balance= equity. I can HELOC 80% of equity amount.

However bank says its current mortgage balance + requested HELOC amount must equal 80% of ARV or more.

This didn't make sense to me but wanted to ask if anyone had different experience?

[Kerry Baird]

Texas and HELOCs are like water and oil. Pull your own FICO if you don't know it already. Call every community bank and credit union in the vicinity of the property. Ask them, "With a FICO of ###, what rates and terms can you offer me? " Ask specifically about the LTV.

Unlike the conventional mortgage space, HELOCs are all over the place in terms of length of draw period, whether they are interest only, what the max LTV can be.

If you don't have anything local that works, you may also want to try PenFed, WAFD Bank, Frost, Hanscom FCU, Bancorp South.