Should I Refinance? Calculate Your Savings
—
Full Loan Comparison
| Metric | Current LoanCurrent | New LoanNew | DifferenceDiff |
|---|---|---|---|
| Interest Rate | — | — | — |
| Monthly Payment (P&I) | — | — | — |
| Loan Term Remaining | — | — | — |
| Total Interest Cost | — | — | — |
| Total Cost (Interest + Balance) | — | — | — |
| Year | Principal | Interest | Balance |
|---|
Disclaimer: Results are estimates for educational purposes only and do not constitute financial advice. Actual savings depend on your credit score, lender fees, prepaid interest, and local costs. Consult a licensed mortgage professional before refinancing.
Texas Refinance Breakdown
Refinancing a mortgage in Texas offers homeowners a way to lower their monthly payments or tap into their home equity. With strong property appreciation across metros like Austin, Dallas, Houston, and San Antonio, many Texas homeowners currently have substantial equity available to leverage. Texas operates under some of the strictest cash-out refinance regulations in the nation, rooted in the state constitution, making it essential that borrowers understand the rules before proceeding.
Refinance Closing Costs in Texas
Closing costs for a refinance in Texas typically range from 2% to 3% of the loan amount, with a state average near $3,800. Texas is a title company state, meaning you are not legally required to hire a closing attorney. Notably, Texas does not charge a mortgage recording tax, which keeps refinance closing costs slightly below the national average. For cash-out refinances specifically under Texas Section 50(a)(6), closing costs are constitutionally capped at 2% of the loan amount, protecting borrowers from excessive lender fees.
Cash-Out Refinance Rules in Texas
Texas has some of the strictest cash-out refinance laws in the country under Section 50(a)(6) of the Texas Constitution. The total of your new loan plus any other liens cannot exceed 80% of your home's fair market value. Additionally, you can only do one cash-out refinance per year, and closing costs on a 50(a)(6) loan are constitutionally capped at 2% of the loan amount. A 12-day waiting period applies from the date you receive the required disclosures to closing, and you have three business days after closing to rescind the transaction.
Local Refinance Assistance Programs
The Texas State Affordable Housing Corporation (TSAHC) and the Texas Department of Housing and Community Affairs (TDHCA) primarily focus on purchase loans, but veterans should look into the Texas Veterans Land Board (VLB) which offers highly competitive refinance rates for eligible service members and surviving spouses of Texas veterans. Income-qualifying homeowners may also explore streamline refinance options through FHA and VA programs offered by TDHCA-approved lenders statewide.