Home Equity Loans & HELOC in El Paso
El Paso home values have risen — you may be sitting on significant equity. Here is how to tap it, the Texas-specific rules you must know, and how ProGen helps you understand your position.
Get a Free Equity AnalysisYour Options
3 ways to tap your El Paso home equity
Home Equity Loan (Second Mortgage)
A lump-sum loan secured by your home equity, with a fixed interest rate and fixed monthly payments over 5 to 20 years. Best when you need a specific, known amount — home renovation, medical expense, or debt consolidation. Your existing mortgage is unaffected.
Pros
- +Fixed rate and payment — predictable
- +Lump sum for known expenses
- +Does not change your current mortgage terms
Cons
- −No flexibility after funding
- −Two monthly payments (existing mortgage + new loan)
- −Closing costs of 2% to 5% of loan amount
HELOC (Home Equity Line of Credit)
A revolving credit line secured by your home, similar to a credit card. You draw funds as needed during the draw period (typically 10 years), then repay during the repayment period. Best for ongoing expenses — renovations in phases, tuition payments, or emergency fund.
Pros
- +Draw only what you need — pay interest only on what you use
- +Flexible — reuse funds as you repay
- +Lower initial payments during draw period
Cons
- −Variable rate — payment can increase if rates rise
- −Temptation to overborrow
- −Can be frozen by lender if home value drops
Cash-Out Refinance
Replace your existing mortgage with a new, larger loan and receive the difference in cash. If you have a high-rate mortgage, this can simultaneously lower your rate and access equity. Texas has specific rules: 12-day waiting period, 80% LTV max, and 3% fee cap.
Pros
- +Can lower your overall mortgage rate
- +Single monthly payment
- +Often lower rate than HELOC or home equity loan
Cons
- −Resets your mortgage term
- −Higher closing costs (2% to 4%)
- −Texas 12-day waiting period before close
Texas-Specific Rules
Texas home equity laws you must know
Texas has some of the strongest homeowner protections in the country — but also some of the most restrictive rules on home equity lending. Know these before you apply.
80% Combined LTV Cap
Your total mortgage debt (first + second liens) cannot exceed 80% of your home's appraised value. This is a Texas constitutional protection for homeowners.
12-Day Waiting Period
Texas requires a mandatory 12-day waiting period between when you apply for a home equity loan or cash-out refi and when you can close. This gives you time to reconsider without pressure.
3% Fee Cap
Lender fees on Texas home equity loans cannot exceed 3% of the original loan amount. This protects borrowers from excessive upfront costs.
One Equity Loan at a Time
Texas limits homeowners to one home equity loan at a time on a given property. You must pay off an existing home equity loan before taking a new one.
Primary Residence Only
Texas home equity loans under Section 50(a)(6) are only available on your primary residence — not on investment properties or vacation homes.
Right of Rescission
After closing, you have three business days to rescind (cancel) a home equity loan without penalty. This is a federal consumer protection right under the Truth in Lending Act.
FAQ
Home equity questions answered
What is the 80% LTV rule for home equity in Texas?
Texas law limits combined home equity borrowing to 80% of your home's appraised value. If your home is worth $300,000 and you owe $200,000, your maximum equity loan is $40,000 — because $200,000 + $40,000 = $240,000, which is 80% of $300,000. This rule applies to all home equity loans and HELOCs under Texas Constitution Article XVI, Section 50(a)(6).
What is the difference between a HELOC and a home equity loan?
A home equity loan gives you a lump sum at a fixed interest rate with fixed monthly payments. A HELOC (Home Equity Line of Credit) is a revolving line of credit — you draw what you need, when you need it, up to your limit. HELOCs typically have variable rates. Both are secured by your home.
How is a cash-out refinance different from a HELOC in Texas?
A cash-out refinance replaces your existing mortgage with a new, larger loan and gives you the difference in cash. A HELOC is a second loan on top of your existing mortgage. Cash-out refis typically offer lower rates but reset your mortgage term. Texas also limits cash-out refis to 80% LTV and has a 12-day waiting period after application before you can close.
How much equity do El Paso homeowners have?
El Paso home values have appreciated significantly in recent years. Many homeowners who purchased 3 to 7 years ago have built substantial equity — often $40,000 to $100,000 or more depending on neighborhood and original purchase price. ProGen can provide a free equity analysis based on current GEPAR MLS comparable sales.
Can I use a home equity loan to buy a rental property in El Paso?
Yes. Using a HELOC or home equity loan as a down payment on an investment property is a common real estate strategy. However, you are securing both your primary home and the investment property with debt — if either property loses value or you cannot make payments, both are at risk. Consult a licensed lender and financial advisor before proceeding.
Know Your Equity
Find out how much equity you have — for free.
ProGen Real Estate provides free equity analyses for El Paso homeowners using current GEPAR MLS data. Know your position before you call the bank.
Get Your Free Equity AnalysisProGen Real Estate — Josue R. Jimenez, Licensed Texas Broker — TREC #619091 — (915) 691-1082