05/14/2026
There are 3 main ways homeowners tap into their home equity… but they are NOT all created equal. 👀
#1. Cash-Out Refinance
This replaces your current mortgage with a brand new loan for a higher amount and gives you the difference in cash as a one-time lump sum payment.
✅ Pros:• Usually offers lower interest rates than other equity options• Can consolidate debt into one payment• Fixed rate/fixed payment options available
⚠️ Cons:• You may have to restart your mortgage term• Closing costs apply• If your current rate is low, you may lose it by refinancing (depending on the market)
#2. HELOC (Home Equity Line of Credit):
Think of this like a credit card secured by your home. You borrow only what you need, when you need it. Most recently almost all lenders are requiring a minimum draw at closing so important to ask what that amount is.
✅ Pros:• Flexible access to funds• sometimes you can have Interest-only payment options during draw period• Great for ongoing projects or emergency access
⚠️ Cons:• Mostly Variable interest rates that can increase but there are now fixed rate options too• Payments can rise significantly later depending on increase of amount taken out and if interest only rates can rise• Easy to over-borrow if not careful
#3. HELOAN (Home Equity Loan):
This is a lump sum second mortgage with a fixed payment.
✅ Pros:• Fixed rate and predictable payment• Great for one-time large expenses• Keeps your first mortgage untouched
⚠️ Cons:• Separate payment from your mortgage• Closing costs may apply• Less flexibility once funds are disbursed
🚨 TEXAS HOMEOWNERS — IMPORTANT 🚨Texas has very specific equity laws. If your current mortgage is already a Texas Cash-Out loan (A6 title policy), Texas does NOT allow you to place a HELOC or HELOAN behind it.
That means your options may be more limited than you think — which is why it’s so important to speak with someone who understands Texas equity rules BEFORE making a move.
Every homeowner’s situation is different. The “best” option depends on your goals.
Questions about your equity options? Let’s talk through it. (817) 60
