Is there such a refinancing rule in Texas?

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hmw
Posts: 923
Joined: Sun Mar 02, 2014 11:44 am

Is there such a refinancing rule in Texas?

Post by hmw »

I am in the process of doing a refinancing of my mortgage with better.

I locked the rate at 2.75%. I will get a credit that will cover all my closing cost and I will get about $1000 cash to me at closing.

Better just told me the following:

“ In the state of Texas, customers cannot receive any cash back at closing on a rate and term refinance.”

Better wants me to get a lower rate with a smaller credit.

Is there such a rule in Texas? Anyone received cash at closing in Texas?

Thanks
Silk McCue
Posts: 5788
Joined: Thu Feb 25, 2016 7:11 pm

Re: Is there such a refinancing rule in Texas?

Post by Silk McCue »

I certainly expect that Better knows what they are talking about.

This reference states the same:
Important: Zero cash back allowed
https://www.afrwholesale.com/wp-content ... d-50a4.pdf

Cheers
txottopilot
Posts: 21
Joined: Tue Apr 04, 2017 11:44 am
Location: Republic of Texas

Re: Is there such a refinancing rule in Texas?

Post by txottopilot »

Yes, any cash back on a refinance in Texas classifies it as a cash-out refinance. A Texas cash-out refinance loan has different rules, most importantly an additional fee associated with the refinance.

This may help.

https://themortgagereports.com/41538/te ... ed-to-know
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Jeev1
Posts: 15
Joined: Wed Mar 17, 2021 9:37 pm
Location: TX

Re: Is there such a refinancing rule in Texas?

Post by Jeev1 »

This is how my refinance agent handled it;
The cash was applied to the the new loan amount thereby reducing the principal on day 1 of new loan.
amindu
Posts: 206
Joined: Thu Aug 04, 2016 11:59 am

Re: Is there such a refinancing rule in Texas?

Post by amindu »

you also cannot refinance for another 12 months.
Topic Author
hmw
Posts: 923
Joined: Sun Mar 02, 2014 11:44 am

Re: Is there such a refinancing rule in Texas?

Post by hmw »

Jeev1 wrote: Tue Sep 14, 2021 11:08 am This is how my refinance agent handled it;
The cash was applied to the the new loan amount thereby reducing the principal on day 1 of new loan.
I like this idea. I will ask if this is an option for me.

Thanks
MrJedi
Posts: 1072
Joined: Wed May 06, 2020 11:42 am

Re: Is there such a refinancing rule in Texas?

Post by MrJedi »

Another potential option is to try to jack up your prepaids and roll it into the loan to soak up more credits. For example, aim to have the loan funded early in the month like on the 2nd or 3rd for more prepaid interest. Also see if property taxes or insurance can be paid through the closing if not already.

Another potential is if you don't have an escrow already, you can ask to add an escrow and the initial escrow funding can be rolled into the loan as well. Then after closing you can request to close out the escrow.
basspond
Posts: 1470
Joined: Wed Nov 27, 2013 4:01 am

Re: Is there such a refinancing rule in Texas?

Post by basspond »

Yes, it was closing out the Escrow when we refinanced with over 20% equity.
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