James and Olivia, a married couple, own a homestead in Dallas, Texas. James wants to obtain a home equity loan, but Olivia refuses to sign the loan documents. The lender suggests that James alone can proceed since the property deed is only in his name. Under Texas law, which statement is correct?
Correct Answer
A) Both spouses must consent to a home equity loan on a Texas homestead, regardless of whose name is on the deed
Under Texas Constitution Article XVI, Section 50(a)(6)(A), a home equity loan on a homestead requires the consent of each owner and each owner's spouse. Even if James is the sole name on the deed, if the property is their homestead, Olivia must consent. Texas homestead protections attach to the marital residence regardless of title.
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Related Concepts
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
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Previous Question
Patricia receives a home equity loan application from a Texas homeowner on April 1. She processes the loan and presents the final terms on April 5. Under Texas Constitution Article XVI, Section 50(a)(6), when is the earliest the loan can close?
Next Question
A lender discovers that a home equity loan on a Texas homestead was closed in violation of one of the constitutional requirements under Article XVI, Section 50(a)(6). The lender sends the borrower a notice to cure the defect. Under Texas law, how long does the lender have to cure the defect after notifying the borrower?