Cash Out Refinancing Houston

With cash-out refinancing, Houston real estate investors have simple, direct access to funding.

Cash Out Refinance for Real Estate Investors in Texas

Conventional financing from traditional lenders, like banks, has stricter underwriting guidelines than private money lenders like Pioneer Hard Money.

We can fund based on assets rather than personal finances. With this model, we can lend fast! Moreover, we provide private loans to investors and borrowers with bad credit, helping them when faced with the following:

Foreclosure
Low Credit Scores
Low Income

When you need a hard money refinance, Pioneer Hard Money is here to help. Contact us today to learn more about your options!

What Is Cash-Out Refinancing?

A cash-out refinance loan is a blend of a traditional refinanced mortgage and an equity loan. Across the United States, homeowners use this method to withdraw equity from homes in cash.

When a homeowner refinances their mortgage, they receive cash for a percentage of the difference between the remaining value of a loan and the home’s current value. Under Texas law, homeowners can take out up to 80% of the home’s equity. Then, the new mortgage covers the balance of the previous and creates a new loan.

For real estate investors, this is an opportunity to leverage the value of a real estate project prior to its sale. It allows them to reinvest in a new project without missing an opportunity.

What is the Benefit of a Texas Cash Out Refinance?

In addition to the convenience of fast cash for your existing equity, another significant benefit is getting a loan through cash-out refinancing with a private money lender. The remaining cash left over is not considered income because it is from your existing equity, which means it is TAX-FREE!

Then you can then use this TAX-FREE private money 100% for your investment or purchase!

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How Does a Cash Out Refinance Hard Money Loan Work?

With Hard Money Cash Out Refinancing, you replace your existing mortgage with a new loan. The difference between the existing mortgage and the more considerable hard money cash-out refinanced loan is that the cash goes to you. Our hard money cash-out refinance loan rates are lower than your typical credit card rate, making it a more affordable option.

What that means for you:

The borrower has an existing mortgage balance of $50,000.
They get a Cash Out Refinanced Loan for $100,000.
The remaining balance is theirs to use for investment.
$100,000 – Cash Out/Refi Loan
– $50,000 – Mortgage Balance

Fast Loans | Quick Closing | Best Fees

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Frequently Asked Questions

Does the State of Texas regulate second homes and investment properties?

No, Texas does not regulate cash-out refinancing for investment properties or second homes. Currently, the law applies solely to primary residences. If you are in the Greater Houston Area and in need of a hard money refinance loan, reach out to us today.

How do people use a cash-out refinance loan?

Homeowners can use this loan program in several different ways.

Start a business or reinvest in an REI project
Gain loan terms to match the smaller balance
Leverage mortgage-interest deductions when you reinvest the cash into the property
Buy out your co-owner after a split

Can you pull cash out from an investment property?

Yes, real estate investors can pull cash from an investment property with cash-out refinancing. Houston REIs use this tactic often to take advantage of different opportunities.

However, there are restrictions that apply in Texas. If it’s not your primary residence, there is a limit of 70% of the home’s value instead of 80%.

For example, if your property has a value of $200,000, you can borrow up to $140,000.

Texas Cash-Out Refinance Rules (Primary Residence)

Before 2018, the state law did not encourage Texas cash-out refinance loans. However, lawmakers in the state eased regulations over time. Today, any homeowner is eligible for a Houston cash-out refinancing loan.

However, there are some cash-out refi rules to consider. Luckily, these rules apply solely to your primary residence. While some limitations apply, real estate investors can use a refi on an investment property.

Closing costs charged by the lender cannot go over 2% of the loan amount. This only applies to processing or origination fees.
The new loan amount has a limit of 80% of the property’s value, which means you cannot touch 20% of the equity.
Any liens or second mortgages should be paid in full.
Generally, you have to wait six months after you purchase the property to refinance. A Texas cash-out refinance is only viable when an existing mortgage has been in place for at least six months.
You have to wait a year between Houston cash-out refinancing loans.
For a Texas section 50(a)(6) mortgage refinance, there are certain waiting periods: seven years after foreclosure, four years after a short sale, and four years after bankruptcy.
The federal government does not back cash-out mortgages.
These rules do not bind second homes or investment properties.