As we Texans know mortgages for taking cash out of our primary home have pretty unique rules. There is the “once a cashout always a cashout” rule. Which was that once you do a cashout loan any future loan will have to follow the Texas cashout rules, such as the max loan would be 80% of the homes value never more. There was the “3% in fees” rule. This rule stated that all fees for the loan can not be above 3% of the loan amount. The fees included: lender fees, appraisal, survey, title co fees etc. This made it almost impossible for lenders to do cashout loans on smaller loans, as the fees were normally higher than 3% of the loan amount(for smaller loans). Well Fannie Mae has now made some major changes to Texas Cashout loans:
No More “Once a cashout always a cashout” rule- this rule is no longer in affect. Your loan can now go over 80% of the home’s value for any future loans. This is great in case the home value went down and you still needed to refinance. Thou keep mind that any loan where you get cashout on your primary home would still be limited to 80% of the home’s value.
The Rule on total fees- This has now changed, as it was just changed to 2% of the loan amount but these fees do not count: in the 2%: discount points, survey costs, appraisal costs, title insurance premiums, etc. it reduces the different fees included and is fantastic as this now allows the 2% in fees to only count the lender fees. This will allow many people to refinance and do a cashout loan that could not before due to this rule.
Keep in mind these rule changes are only for Texas Cashout loans of your primary home. Not investment properties or 2nd homes. Call me if you need anything!