Texas Home Equity Loan

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Stuck in the Past: The Texas Home Equity Loan Story

Until 1997, the Texas constitution banned any Texas home equity loan to be lent. In 1997, Texans overturned this outdated law and a wave of lenders began hitting Texas hard with home equity loans. Texans are still behind the times in that only half of the Texans have a Texas home equity loan as compared to the rest of the country. They are slow to joining the rest of us as they were the last state to fully approve the basic home equity loans.

Before the Texas home equity loan, homeowners were forced to sell their property in order to take advantage of the equity they had built up in it over the years. There were certain instances where you could get a home equity loan such as for home improvement or taxes. However, you definitely could not obtain a Texas home equity loan for debt consolidation or something of that nature.

Although most other states in the nation appear to have a strong preference for the HELOC or Home Equity Line of Credit, the Texas home equity loan of choice remains the traditional closed end home equity loan. The main reason for this is that the overturning of that pesky law did not make arrangements to allow the HELOC in Texas, so Texans still cannot get home equity lines of credit!

Even though the HELOC is still unavailable in Texas, getting a Texas home equity loan is much easier now than it was before 1997. Lenders have flooded the Texas market with the Texas home equity loan so at the very least, the traditional loan is available to Texas consumers.

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